Week ahead: Markets look to key US jobs data after Labor Day

US markets are shut for Labor Day on Monday, but there is plenty to look out for this week. The big event comes on Friday with the August nonfarm payrolls report. With the Federal Reserve saying that it’s ready to start cutting interest rates, the report will guide expectations for the September policy meeting and the market’s assessment of how many rate cuts will be delivered this year.

Here are the week’s key events:

Monday, September 2nd: US markets shut for Labor Day

Monday sees the US stock market closed for Labor Day – which usually marks the start of a new phase for equities heading into the year-end. With 2024 an election year, the period from Labor Day through to November 5th could be especially volatile, with September the worst month on average for Wall Street. With US markets shut, the focus on Monday is on The Caixin manufacturing survey from China and final manufacturing PMI reports for the Eurozone and Britain.

Tuesday, September 3rd: Switzerland inflation reading

Switzerland hasn’t just beaten inflation; it’s entered into outright deflation. Today’s CPI print could show a further drop in prices with the Swiss franc continuing to show strength. The pressure of deflation could spark a rethink for the Swiss National Bank, which is faced with tricky path to unwind its balance sheet and whose governor is about to leave. Elsewhere, look out for the US manufacturing PMI from the ISM, including the closely watched prices data set for a read on inflation. The prior report showed prices increasing even as manufacturing activity entered deeper into contraction.

Earnings: Zscaler (ZS)

Wednesday, September 4th: Bank of Canada policy meeting, JOLTS report

The Bank of Canada is expected to cut rates for a third straight meeting as economists forecast faster and deeper cuts in the coming months. The central bank is expected to cut rates to 3% from the current 4.5% by next July, with the expected pace accelerating as markets become more convinced the Federal Reserve is joining the easing party. Meanwhile look for the JOLTS job openings report from the US, an important leading indicator ahead of Friday’s payrolls report.

Earnings: GameStop (GME), Hewlett Packard Enterprise (HPE)

Thursday, September 5th: US ADP nonfarm employment report

Reserve Bank of Australia governor Bullock hits the wires during the Asian session ahead of some construction data from the UK and German factory orders. The main focus for the day is the US though as we look to the ADP nonfarm employment report a day before the BLS data is due. Though not always a great indicator for the official data, the ADP report can be market moving. Weekly unemployment claims data and the ISM services PMI are also due on the tape.

Earnings: DocuSign (DOCU)

Friday, September 6th: US nonfarm payrolls report

The main event of the week is the August payrolls report. With markets all but certain the Federal Reserve is going to cut rates in September after Jay Powell’s dovish speech in Jackson Hole, the question is one of how fast and how deep does the US central bank need to go. The disappointing July payrolls report helped spark a market correction in early August, after triggering the ‘Sahm rule’ that has correctly predicted previous recessions. Subsequent revisions to BLS data suggests the labour market is even weaker than thought.