Market Movers ahead
- In the US, non-farm payrolls are likely to show healthy gains along with another uptick in wage growth.
- In Europe, the Italian budget projections will continue to be a theme for financial markets as well as the reaction from the EU commission and rating agencies.
- In the UK, the Conservative Party Conference beginning on Sunday and lasting until Wednesday will be critical for the outlook of Brexit negotiations with the EU.
- In China, there are downside risks to the PMI number for September in light of the trade war with the US, while Japan may see a small rebound in business confidence.
- In Sweden, government formation talks will be watched along with the PMI survey, which should post a modest rebound.
Global macro and market themes
- Market participants are not waiting for the first ECB hike to actually arrive before reacting.
- The next big move in EUR/USD is up when the first ECB hike draws closer. We forecast 1.25 in 12M.
- The US economy is in great shape despite trade war concerns supporting the case for further Fed rate hikes and higher US Treasury yields.
