In terms of data, US core-PCE inflation increased to 4.2% in July, up from 4.1% in June, as expected. However, the monthly growth was only 0.2% for the second month in a row.
In the Eurozone, headline inflation remained at 5.3% in August (vs. 5.1% expected), but core inflation also decreased to 5.3%, in line with forecasts. Market rate expectations have weakened as a result of less aggressive central bank language and good inflation data.
The August labour market data for the United States will be published today. Nonfarm payrolls in the United States are predicted to be 170k, the lowest level since December 2020. The unemployment rate in the United States is expected to remain unchanged at 3.5%.
The release is expected to demonstrate that the pace of payroll growth has slowed even further. The data create some event risk for US interest rates and the USD.