With a new trading week comes new opportunities. So, we’ve gathered insights for the week ahead that highlight the current trends, scheduled events and potential movers to watch. Let’s get started.          

Calendar Events     

Eurozone Sentix Investor Confidence – Oct 6  
Eurozone Retail Sales – Oct 6  
Reserve Bank of New Zealand Interest Rate Decision – Oct 7   
Bank of Japan Governor Ueda Speaks – Oct 7  
FOMC Minutes – Oct 8  
Fed Chair Powell Speaks – Oct 9  
US Non-Farm Payrolls – Oct 10  
US Unemployment Rate – Oct 10  
US Average Hourly Earnings – Oct 10  
Canada Employment Change – Oct 10  
Canada Unemployment Rate – Oct 10  
US Michigan Inflation Expectations – Oct 10  
US Consumer Sentiment – Oct 10   

Top Things to Watch  

US Government Shutdown Continues  

The US government shutdown continues as the government has suspended around 800,000 federal workers and left another 700,000 working without pay, halting key operations and delaying major data releases such as the September jobs report. The prolonged closure is estimated to cost the economy up to $15 billion per week, heightening uncertainty over fiscal stability and complicating the Federal Reserve’s policy outlook.  

Labor Market Data   

Due to the delay of economic data releases, September’s labor market report could be released this Friday if the US government reopens. Friday could be the most volatile day of the week as Nonfarm Payrolls (NFP) and the unemployment rate take center stage. NFP for September is expected to show an increase of 52,000 jobs while the unemployment rate is projected to remain steady at 4.3%.  

Japan Welcomes New Prime Minister   

Japanese stocks surged to record highs while the yen slumped after Sanae Takaichi won the ruling Liberal Democratic Party leadership, positioning her to become Japan’s first female prime minister.   

Seen as a fiscal dove aligned with Shinzo Abe’s “Abenomics”, a strategy of monetary easing, fiscal stimulus and reforms to support growth, Takaichi’s win raises expectations for ongoing stimulus and a delay in BOJ rate hikes, fueling yen weakness and near-term volatility.  

Fedspeak in Focus  

Markets will closely follow Fedspeak throughout the week, with several officials, including Chair Jerome Powell, set to deliver remarks that could shape expectations for future rate cuts. Investors will watch for any hints on how policymakers view the impact of the government shutdown, recent labor market weakness, and inflation trends on the Fed’s next moves.  

Trending Now: USD/JPY  

  Source: Acuity  

Source: TradingView  

Why It’s Trending?  
  

USD/JPY soared above 150, with the yen under pressure as markets anticipate the BOJ to maintain its ultra-loose monetary policy under the incoming government led by Sanae Takaichi. Her pro-stimulus stance reinforces expectations that the BOJ will delay further tightening. Meanwhile, the US dollar remains supported by firm Treasury yields and cautious sentiment ahead of key Fed speeches, which could push back rate-cut expectations.   

However, despite the pair’s rise, overall sentiment remains bearish, as many continue to view the yen’s weakness as overextended and anticipate potential intervention if the currency’s slide deepens. (Source: Acuity)