In the current trading week, DAX investors are eagerly awaiting the official US labor market report next Friday. However, the joy of interest rate cuts on both sides of the Atlantic could be dampened by newly ignited geopolitical risks in the Middle East. Despite the public holiday in Germany, the stock exchanges in Frankfurt am Main will remain open on Thursday.
DAX Chart
Source: Tradingview
Geopolitical risks catch investors on the wrong foot
A new escalation in the Middle East conflict weighed on stock markets worldwide late on Tuesday evening.
It remains to be seen how long the legs of geopolitical exchanges will be. Investors should be prepared for the possibility of further escalation in the coming hours and days.
ADP data give first foretaste of US labor market data - further US data in focus
This afternoon's ADP data (14:15) should be exciting. This data usually provides an initial indication of the official US labor market report.
From the perspective of the economic data calendar, US data could provide further important impetus on Thursday. Initial claims for US unemployment benefits (14:30) are usually expected to be the first event.
The ISM data for the services sector could be of even greater importance (16:00). The counterpart for the manufacturing sector had already missed expectations on Tuesday (47.5 points vs. 47.2 points).
Economists expect a slight increase in jobs compared to the previous month - further interest rate cuts possible
As expected, the highlight of the week will be the publication of the non-farm payrolls on Friday at 14:30. According to economists, a total of 142,000 new non-farm jobs could have been created in the world's largest economy, slightly more than in the previous month (140,000). The unemployment rate is expected to remain at 4.2 percent.
A look at the development of average hourly wages could also be interesting. Compared to the previous month, an increase of 0.3% is expected, following 0.4% in August.
If the jobs report disappoints, this is likely to further underpin investors' interest rate cut fantasies. At the beginning of the week, Fed Chairman Jerome Powell held out the prospect of further interest rate cuts totaling 50 basis points for the current year.
