US Jobs Report in Full Focus as New Quarter Begins.

The final quarter of the year begins with the US Dollar in a commanding position, following last week's key US inflation data which validated the Federal Reserve's cautious stance on further rate cuts. The Core PCE report met expectations, reinforcing the narrative that the Fed will remain patient in its easing cycle. As markets enter a new month, attention turns to another round of top-tier economic data, headlined by the crucial US employment report on Friday.

The Pound Sterling continues to trade based on the shifting outlooks of other central banks, particularly the Federal Reserve. Last week's price action was dominated by the stronger US Dollar. This week, final readings of UK business activity surveys will be released, but the primary driver for the Pound will likely be the major US and Eurozone data points and their impact on overall market sentiment.

The US Dollar is underpinned by the view that the Federal Reserve remains the most hawkish of the major central banks. This week's influential ISM Manufacturing PMI on Wednesday will offer the first key insight into the US economy in September. However, the main event will be Friday's Non-Farm Payrolls report. A strong jobs number would further solidify the Dollar's standing, while any significant weakness could challenge the current market narrative.

The Euro is facing headwinds from both a strong US Dollar and a relatively dovish European Central Bank. The key data for the single currency this week will be the preliminary pan-Eurozone inflation figures for September, due on Tuesday. The data will be an important input for the ECB's future policy path, but the market's focus is likely to remain on the more impactful US releases later in the week.

Events to Watch This Week:

⦁ Tuesday, September 30: Eurozone Preliminary CPI (Inflation for September)

⦁ Wednesday, October 1: US ISM Manufacturing PMI

⦁ Thursday, October 2: ECB Monetary Policy Meeting Accounts

⦁ Friday, October 3: US Non-Farm Payrolls Report

The start of a new quarter often brings a reassessment of market positioning, but the underlying theme of a resilient US economy and a patient Fed remains intact. This week's US employment report is the most significant scheduled event and will be instrumental in determining whether the US Dollar can extend its recent gains.

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