Markets begin the week digesting weaker US labour data, shifting expectations for the Federal Reserve’s next move, and continued pressure on the euro. Wednesday’s Fed minutes and Friday’s Canadian labour report will be among the key events in focus this week.
Euro Under Pressure
The euro has fallen to its weakest level against the US dollar since May 2025 amid growing economic and political concerns in the eurozone.
In Spain, Prime Minister Pedro Sánchez has called an early election for 29 November following defeats on housing legislation. Meanwhile, France faces weak growth and rising debt, with questions over whether its budget plans can stabilise public finances ahead of the 2027 presidential election.
Together with changing inflation and interest-rate expectations, these pressures continue to weigh on the euro.
Gold Supported by Weaker US Jobs Data
Gold started the week on firmer ground after September’s US labour report came in below market forecasts.
Nonfarm payrolls increased by 29,000, compared with forecasts of around 90,000, while figures for the previous two months were revised lower. The unemployment rate also rose to 4.2%, above the 4.1% forecast.
The weaker report reduced expectations for another Federal Reserve rate increase in October. Markets now price in around a 22% probability of a hike, compared with 64% a week earlier.
US Stocks Rally as Rate Expectations Shift
US equities rose last Friday after the weaker payrolls report. The Nasdaq 100 closed at record highs, with technology and consumer discretionary shares among the stronger performers.
Lower expectations of further Fed tightening could support risk appetite in October. However, the month has historically been associated with periods of elevated stock market volatility, while oil prices remain high and US equity market leadership has become increasingly concentrated in AI-linked and technology shares.
Economic Calendar: What Could Move Markets This Week?
The economic calendar is relatively light, putting greater attention on two releases: the Federal Reserve’s September meeting minutes and Canada’s latest labour market report.
Fed Meeting Minutes
On Wednesday at 21:00 GMT+3, the minutes could provide more detail on how strongly Fed officials supported the prospect of another rate increase after September’s meeting.
Since then, weaker US employment and inflation data have pushed the market-implied probability of an October hike below 25%. If the minutes reveal greater caution among policymakers, they could reinforce the recent repricing of Fed expectations.
Such a shift may weigh on US Treasury yields and the dollar while providing some support to gold. Conversely, signs that officials remain concerned about inflation could revive expectations of further tightening.
Canada Labour Report
Canada’s September unemployment rate report, due on Friday at 15:30 GMT+3, will be the first to cover a full month since US Section 338 tariffs took effect on 22 August. The data could therefore provide an early indication of their impact on Canada’s labour market.
Consensus forecasts point to the unemployment rate rising to 6.5%, returning to its June level. A higher-than-forecast unemployment rate could weigh on the Canadian dollar and contribute to increased price movement across CAD pairs around the release.
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