Following the publication of the latest US labor market data last Friday, investors are looking ahead to the Fed’s minutes from the last US central bank meeting in the middle of the week, which will be crucial for monetary policy guidance. In particular, the focus is likely to be on inflation and interest rate developments.
Dow Jones Industrial Average Index
The US labor market is deteriorating dramatically – the unemployment rate rises to 4.2 percent
The U.S. job market surprisingly weakened significantly in September. Excluding agriculture, the number of employees increased by only 29,000 in September, the U.S. government announced on Friday afternoon. Ahead of Reuters’s questioning, economists had expected an increase of 90,000. The unemployment rate climbed by 0.1 percentage points to 4.2 percent in this context.
At the same time, the number of employees for July and August was revised downward as well. After 21,000 jobs in July, a decrease of 10,000 jobs was reported. For August, initially 162,000 jobs were communicated, then only 133,000.
Accordingly, according to the „Fed-Watch Tool,“ 79.5 percent of market participants now expect a pause in interest rates on October 28, 2026, and 20.5 percent expect a rate hike totaling a quarter of a percentage point. A week ago, 29.1 percent still expected a pause in interest rates.
Fed notes could send monetary policy signals by mid-week – consumer sentiment data (University of Michigan) in focus
Accordingly, investors are awaiting the “FOMC Minutes“ late on Wednesday evening in a comparatively calm week in terms of the economic calendar, which could provide clues regarding US monetary policy.
The weekly initial applications for U.S. unemployment benefits will be worth watching on Thursday (14:30).
On Friday, last but not least, preliminary consumer sentiment data from the University of Michigan could provide some momentum (16:00).
