In the second half of the week, the services sector and labor market will be in the spotlight. The ISM Non-Manufacturing PMI (Fri) and US Jobs Report (Fri) will be the key reports of the week. Weaker service sector activity and softer labor market conditions would support bets on a Q1 2024 Fed rate cut.
The EUR
On Tuesday, manufacturing PMIs for euro area member states and the Eurozone will influence the EUR/USD. Deterioration in manufacturing sector conditions could drive expectations of a euro area recession. Beyond the headline numbers, investors must consider the sub-components, including prices, new orders, and employment.
German unemployment figures (Wed) need consideration. A deteriorating labor market could impact consumer spending and dampen demand-driven inflation. Softer inflationary pressures could allow the ECB to begin discussions about rate cuts.
On Thursday, French…
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