With the Federal Reserve firmly committed to raising interest rates to tame inflation, even at the cost of a decline in economic growth, investors will be focusing on Friday’s August jobs report for an indication of strength in the labour market. U.S. equity market investors will continue to reposition after Friday’s steep selloff, which erased all of August’s modest gains. The Eurozone is to publish what will be closely watched inflation data, as European Central Bank officials make the case for a big rate hike next month. Meanwhile, Chinese PMI data is expected to point to ongoing weakness in the world’s number two economy. Here’s what you need to know to start your week.
The final employment report before the Fed’s September 20-21 meeting will be keenly anticipated by market watchers trying to figure out whether the central bank can pull off an economic slowdown without triggering a recession as it battles to tame inflation.
The risk of a recession has increased as the Fed aggressively hikes rates, weighing on consumer demand and the housing market. The U.S. central bank has hiked its policy rate 225 basis points since March.
Ahead of Friday’s jobs data the U.S. is set to release a report on JOLTs Job Openings for July on Tuesday, with economists expecting job openings to remain high, pointing towards still solid demand in the labour market.
The Eurozone is to release CPI figures for August on Wednesday with annual inflation expected to accelerate to 9% from 8.9% in July, well above the ECB’s 2% target.
The data will likely add to pressure on the ECB to hike rates aggressively at its upcoming September meeting even amid the mounting risk of a recession.
China is to publish official PMI data for August on Wednesday after an unexpected contraction in business activity in July triggered by lockdowns.
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