Key Economic Events and Market Outlook for October 5-9
The upcoming week of 5th-9th October is relatively light in economic events, typical after the release of the Non-Farm Payrolls (NFP) data. The week kicks off with services PMI reports from the Eurozone, the U.K., and the U.S. Other key events include a speech by Bank of Japan (BoJ) Governor Ueda, Australia's Westpac consumer sentiment report, and Japan's average cash earnings data. The U.S. will also see the release of the FOMC meeting minutes and unemployment claims figures, while Canada will publish employment data and the unemployment rate.
In the U.S., the consensus for the final services PMI is 58.7, unchanged from the prior reading. The ISM services PMI is expected at 55.1, slightly down from 55.4 previously. Analysts predict that September's services figures will show some moderation after a strong August, with softer business conditions and potential weakening in the employment component. The focus will be on the prices paid component, which is expected to remain elevated due to continued pressure on input costs.
In Australia, consumer sentiment is anticipated to stay deeply pessimistic following a 5.2% decline in September to 84.4. Rising fuel costs and concerns about interest rate hikes are the main drivers of this pessimism. The Reserve Bank of Australia (RBA) recently raised the cash rate by 25 basis points to 4.6%, and fuel costs remain a significant concern due to global supply disruptions. The September FOMC minutes are unlikely to provide clear guidance on the Fed’s rate path, as policymakers remain focused on inflation and labor market conditions.
In Canada, the consensus for employment change is 9.0K, compared to a prior decline of -41.7K. The unemployment rate is expected to rise from 6.4% to 6.5%. Analysts from RBC anticipate that U.S. Section 338 tariffs may have stalled labor market progress without reversing it, with the impact concentrated in more exposed provinces. Despite trade headwinds, solid domestic demand and recent GDP growth are expected to support a gradual labor market recovery through 2026.