Market Focus Shifts to US Payrolls and Inflation Data Amid Turbulent Bond Markets

The third quarter draws to a close, and investors have plenty to focus on in the coming week. US payrolls and inflation data will likely shape expectations for interest rates on both sides of the Atlantic.

Turbulent bond markets, driven by factors like the Iran war, fiscal worries, and AI debt, have pushed global borrowing costs to their highest since the 2007-08 financial crash. Despite this, main world stock indexes are less than 2% off all-time highs and up over 12% for the year.

The spotlight shines on US payrolls, expected to rise by 100,000 jobs with an unemployment rate of 4.2%, according to economists' polls. The Federal Reserve's interest rate hike expectations are also in focus, with futures pricing suggesting a roughly 50/50 chance of another quarter-point increase in October.