Last week brought significant policy shifts and market movements. The People’s Bank of China took decisive steps to boost its economy, introducing major easing measures that included cuts to interest rates and targeted support for the real estate and stock markets.
In the U.S., the S&P 500 ($SPX500) continued to march higher, fueled by gains in tech stocks, even as markets had already priced in the Federal Reserve’s expected 50 basis point rate cut.
The U.S. Dollar Index, however, showed signs of weakness, consolidating around the 100 level as traders weigh the potential impact of continued monetary easing.
All eyes are now on this week’s upcoming economic data to see how it could reshape the current market narrative.
🇪🇺 CPI and Core CPI — October 1, at 12:00 GMT+3
The upcoming release of the Eurozone CPI and Core CPI data will be closely watched by traders, as it provides insight into the region’s inflationary pressures. With a forecast of 0.2% (up from the previous 0.1%), a higher-than-expected result could signal persistent inflation, potentially driving the ECB to adopt a more hawkish stance.
This, in turn, may push $EURUSD higher, while also impacting the DAX, as tightening monetary policy could weigh on European equities. Conversely, a lower figure could weaken the euro and support the DAX’s momentum.
🇺🇸 ISM Manufacturing PMI — October 2, at 17:00 GMT+3
Next up is the ISM Manufacturing PMI – a key health check on the US manufacturing sector. This time, the forecast sits at 48.6, slightly up from the previous 47.2, but still below the 50 mark, indicating contraction. If the actual figure surprises to the upside, we could see renewed optimism around the US economy, potentially lifting indices like the Dow Jones, Nasdaq, and $SPX500.
On the flip side, a weaker number might fuel recession fears, triggering a sell-off in stocks and putting downward pressure on the US dollar.
🇪🇺 S&P Global Composite PMI — October 3, at 11:00 GMT+3
The S&P Global Composite PMI is another crucial release and the second most anticipated indicator for the Eurozone this week. With the forecast remaining steady at 48.9—matching the previous result — this figure will shed light on whether the region’s economy is showing any signs of a turnaround.
A stable or improving reading could help boost confidence in the euro and European equities, while a decline would likely reinforce fears of a sluggish economic recovery. Keep an eye on how this could ripple through other markets like Gold, which tends to react sharply to shifts in economic sentiment across major regions.
🇺🇸 ISM Non-Manufacturing PMI — October 3, at 17:00 GMT+3
The upcoming ISM Non-Manufacturing PMI will be one to watch closely, as it serves as a barometer for the health of the US services sector, which makes up a significant portion of the economy. Last month’s reading of 51.5, just slightly up from 51.4, suggested steady but cautious growth.
With the forecast holding steady at 51.5 for September, a higher-than-expected result could fuel a rally in US indices like the Nasdaq and S&P 500, while also lifting the USD. But if the figure disappoints, it could be a warning sign that consumer demand is faltering ahead of the crucial holiday season.
🇺🇸 Nonfarm Payrolls — October 4, at 15:30 GMT+3
The grand finale for the week is, of course, the Non-Farm Payrolls (NFP) report — a true market mover that could set the tone for the entire month. In August, the U.S. unemployment rate edged down to 4.2%, while NFP grew by 142,000, comfortably within the “safe zone.” All eyes are now on the September report, with expectations holding at 4.2% and a payroll increase of around 140,000. If the numbers show continued resilience, we could see the US Dollar strengthening and US indices pushing higher.
However, a weaker report might reignite fears of economic slowdown, triggering a flight to safety in assets like Gold and pushing stocks lower.
That's it for this week! 👋
