Between geopolitical risks and monetary policy uncertainties, investors are currently searching for their North Star. Geopolitical headlines still clearly trigger reflex reactions, but investors' resilience appears to have increased significantly.
Investors have also re-evaluated Warsh's speech and are now concerned that monetary policy headwinds could become stronger again in the future. This week, market participants are focusing in particular on the official US employment data, which needs to be analyzed for hints on monetary policy.
Dow Jones Industrial Average Index
Middle East risks: Iran and USA attack each other militarily for the first time since late July
For the first time since the end of July, the US and Iran have attacked each other again, bringing simmering geopolitical risks back to the surface. A resolution to the conflict is still nowhere in sight. Recently, however, investors had largely ignored these uncertainties, thus proving almost crisis-resistant.
Purchasing Managers in Focus – „JOLTs“ and ADP Data Could Provide Important Preview of NFPs
The ISM Manufacturing Purchasing Managers' Index will be released on Tuesday afternoon at 4:00 PM.
A first preview of the so-called „NFPs“ could already be provided by the „JOLTs“ (Job Openings and Labour and Turnover Survey) on Tuesday (4:00 PM).
The ADP data, which is expected at 2:15 p.m. on Wednesday, could also provide important insights regarding the situation on the US labor market.
The counterpart to the ISM Purchasing Managers' Index for the service sector is expected on Thursday at 4:00 PM.
US labor market data: Economists expect job growth compared to the previous month
From the perspective of the economic data calendar, the official US employment report at 2:30 PM is likely to be the highlight of the week. Economists expect that a total of 58,000 new jobs were created outside of US agriculture, following a decrease of 23,000 in July.
Consequently, the unemployment rate is likely to stand at 4.1 percent, remaining unchanged compared to the previous month.
Especially after the recent speech by Fed Chair Kevin Warsh at the annual central bankers' meeting in Jackson Hole, Wyoming, U.S. monetary policy has once again become a prominent topic. Warsh had pointed to inflation, thereby fueling concerns of a possible interest rate cut this year.
