In the European session, we don't have much on the agenda as the only notable economic release will be the UK Retail Sales data. The data is not going to change anything for the BoE at this point though, and given that we have the NFP today, the market might not react to it too much. We have also the final Eurozone Q2 GDP report but this is very old data and won't matter at all for the market.
In the American session, the focus will turn to the Canadian jobs data and the US NFP report. It goes without saying that all eyes will be on the NFP report as it will have a much bigger repercussion on interest rates expectations and global markets.
For the NFP, the consensus sees 75K jobs added in August vs 73K in July. This isn't a low number because with lower labour supply under Trump's policies, the breakeven rate of job creation has fallen below 100K (50K-80K) according to most estimates. The breakeven rate is how much jobs the economy needs to create to keep the unemployment rate stable.
Speaking of the unemployment rate, the consensus sees an uptick to 4.3% vs 4.2% prior. Looking at wage growth figures, the Average Hourly Earnings Y/Y is expected at 3.7% vs 3.9% prior, while the M/M measure is seen at 0.3% vs 0.3% prior. Finally, the Average Weekly Hours worked are seen at 34.3 vs. 34.3 prior.
For the Canadian jobs report, the consensus sees 10K jobs added in August vs -40.8K in July, and the unemployement rate to tick higher to 7.0% vs 6.9% prior. The NFP will steal the show, but a weak report might increase the expectations for a BoC rate cut at the September meeting already. Right now, the market sees a 64% probability for a cut.
