Source: Sharecast
Consensus expectations are for payrolls to have increased by 55,000 last month, while the unemployment rate is expected to have remained at 4.1%. Stephen Innes at SPI Asset Management said the payrolls report has become "the hinge" for September.
"The market wants bad news, just not too much of it," he said. "Weak enough to cool the Fed, strong enough to keep stagflation out of the room.
"Another soft payroll print would give markets something increasingly valuable: cover for Warsh to sit out this month. The Fed has never raised rates immediately after two consecutive payroll clunkers, and another underwhelming labour market signal would make a September hike much harder to justify, particularly as policymakers still try to determine whether high oil prices will eventually spill over into the broader long-run inflation story.
"That is the sweet spot traders are hunting. If payrolls wobble without collapsing, Treasury yields can probably stay under pressure, equities can squeeze a little further, and the Fed gets room to wait. If payrolls come in hot, that shelter disappears quickly. Oil is still hovering around $90/bbl, the inflation debate comes straight back through the front door, and the bond market will have every reason to start throwing furniture around the room again."
In the UK, the S&P Global construction PMI for August will be released, while eurozone retail sales data for July will also be out.