Investing.com — With the latest U.S. jobs numbers released this week and Federal Reserve Chairman Jerome Powell speaking, investors may get some hints about the size of the Fed's next interest rate cut. Meanwhile, markets begin the final quarter of what has been a turbulent year. Let's see what happens in the market over the next week.
- US employment statistics
The Fed began its rate cut cycle with a massive 50 basis point (bp) cut earlier this month, but the Fed continues to weigh in on interest rates as investors gauge how quickly the central bank will need to cut rates in the coming months. The focus is on the market.
The Labor Department is scheduled to release its October nonfarm payrolls report on Friday, and economists expect the U.S. economy to add jobs.
Investors will be watching to see whether the jobs report confirms hopes for a soft-landing scenario in which the Fed would rein in inflation without hurting growth.
Weaker-than-expected economic data could reignite concerns about the prospect of a recession, while unexpectedly strong job growth may mean the Fed won't cut rates as sharply as expected as it seeks to avoid soaring inflation. This may cause concern.
- Powell's statement
Federal Reserve Chairman Jerome is scheduled to speak on the economic outlook at the National Association for Business Economics on Monday.
Deutsche Bank analysts said in a note on Friday that Chairman Powell's comments echoed his remarks at a post-meeting press conference in which he justified a sharp rate cut by a clear shift in inflation confidence and, in particular, downside risks. He said he expected the same to be followed. labor market.
Investors will also have the opportunity to hear from several other Fed officials this week, including regional Fed presidents such as , , and .
Ahead of Friday's jobs report, Tuesday's August jobs report and Wednesday's private sector jobs report will provide a broader outlook on labor market conditions.
- 4th quarter starts
The fourth quarter begins on Tuesday after months of market turmoil.
August was a volatile month, with the unwinding of the yen carry trade occurring around the same time the Mag7 tech bull market collapsed and recession fears flared following weaker-than-expected U.S. jobs data.
Stock prices have since hit record highs, but the yen is on course for its best quarterly performance since the 2008 global financial crisis, and benchmark global borrowing costs and oil have both fallen by nearly 15%. China is turning on the faucet with economic stimulus.
The final quarter is likely to be even more volatile as November's US presidential election is contested between Donald Trump and Kamala Harris.
- euro area inflation
The euro zone is scheduled to release preliminary inflation figures for September on Tuesday, and the data will be closely watched as European Central Bank officials consider whether to cut interest rates again in October.
Economists expect annual inflation to reach , thanks to falling energy prices, and fall below the ECB's 2% target for the first time since June 2021, but are expected to rise again at the end of the year.
Investors last week said they thought it unlikely that October 25 The probability of a basis point rate cut is more than 50%.
- crude oil price
Oil prices rose on Friday before settling, but fell this week as investors weighed hopes for increased global supplies against new stimulus from China, the biggest oil importer.
On a weekly basis, it stabilized at around 3%, while falling around 5%.
The People's Bank of China on Friday announced new stimulus measures aimed at bringing economic growth back to this year's target of around 5%.
But concerns about oversupply have grown after reports that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, plan to increase production by 180,000 barrels a month starting in December.
Rising tensions in the Middle East increased the risk of supply disruptions and continued to support oil markets.
Energy traders will be watching labor market data closely in the coming days, as lower interest rates often boost economic activity and energy demand.
–Reuters contributed reporting
