The first Friday of a new month is imminent which means it always has one of the key data releases for the next few weeks.That is of course, the US Non-Farm Payrolls report which will have a big influence on the data dependent Fed and its FOMC meeting later in the month.

After last month’s upside surprise saw a hot print of 528k jobs, a softer headline figure is forecast in August. But with the jobless rate expected to keep around the multi-decade low of 3.5%, wage growth should stay above the 5% level. We note that economists do expect the unemployment rate to begin to trend higher from the end of the year as jobs growth is forecast to slow.

The ongoing tightness of the labour market will be a key factor for policymakers, even as other indicators of the labour market like in the PMI surveys are already showing signs of weakness.

Back across the pond, inflation may not have peaked in Europe where the energy crisis seemingly gets worse by the week. Natural gas prices are soaring again sending prices to record highs, again. The unscheduled three-day maintenance starting on Augsut 31 of the Nord Stream pipeline has also brought more uncertainty to the region’s energy supply. With it, the euro has hit new cycle lows which will act as support or resistance going forward. Major support on the Dax sits not far below current trading at 12,400.

The record high eurozone headline print of 8.9% in July may be at risk of being breached once more in the coming months. Wednesday’s August release will certainly get the ECB Council’s attention ahead of their meeting in the second week of September.

Here are the key risk events on the calendar:

Major risk events of the week

31 August 2022, Wednesday:

–Eurozone CPI: The market median estimate for the headline print is for a one-tenth drop to 8.8% in August. The July reading was the highest since the euro was created in 1999. Core inflation, which strips out more volatile elements like food and energy, rose 5.1%. The next ECB meeting is on September 8.

01 September 2022, Thursday:

-US ISM: Analysts forecast the manufacturing index falling to 52.1 from 52.8 in July. Following the deterioration in the S&P Global’s equivalent survey, this data will be watched closely to see if it tracks these more frequent measures. Easing bottlenecks are set to continue while prices paid, which fell to the most since 2017 last month, could benefit further from declining commodity prices.

02 September 2022, Friday:

–US Non-Farm Payrolls: Consensus expect more job gains with a median forecast of 300k for the headline print. This comes after a fourth straight beat in July and strong revisions to past data. The unemployment rate is forecast to remain at historic lows of 3.5% and support wage growth which is forecast at 0.4%.