Markets enter the week with several major drivers in focus. US–China talks ended on Friday without a significant breakthrough, while gold moved lower on Monday amid rising oil prices and growing expectations of another Fed rate increase in October. Geopolitical tensions also remain elevated after President Trump rejected Iran’s proposal to reopen the Strait of Hormuz over the weekend.
Attention now turns to US inflation and labour market data, which may drive volatility across USD pairs, gold, and equity indices. In Australia, the RBA interest rate decision and accompanying guidance could set the near-term tone for the Australian dollar.
RBA Rate Decision
The Reserve Bank of Australia meets on 29 September at 07:30 GMT+3, with markets widely expecting another 25-basis-point increase. Such a move would lift the cash rate target from 4.35% to 4.60%, its highest level since November 2011.
Recent inflation data has strengthened expectations for tighter policy. Some economists also expect the RBA to follow a September increase with another rate hike in November. However, additional tightening could put greater pressure on economic activity, and some economists see a growing possibility of recession as higher borrowing costs weigh on growth.
Ahead of the decision, AUD/USD is trading near its August lows. With a September rate increase largely anticipated, the market reaction may depend more on the RBA’s guidance and its assessment of inflation and economic growth. Traders will also be watching the press conference at 08:30 GMT+3 for signals about the potential path of interest rates.
PCE Price Index
On 30 September at 15:30 GMT+3, markets will turn to the PCE Price Index. Inflation data is becoming increasingly important ahead of the Federal Reserve’s interest rate decision.
As of 28 September, the CME FedWatch Tool indicates around a 70% probability of a 25-basis-point rate increase at the Fed’s October meeting.
A stronger-than-expected PCE reading could reinforce expectations that US rates may remain higher or rise further.
Nonfarm Payrolls and Unemployment Rate
On Friday, 2 October at 15:30 GMT+3, markets will turn to the latest US Nonfarm Payrolls and unemployment data.
The previous report showed that the US economy added 162,000 jobs in August — the strongest increase in five months and well above market expectations of 56,000.
The unemployment rate remained unchanged at 4.1%. The upcoming figures will be closely watched for further signs of labour market strength. Another solid increase in employment could reinforce expectations of further Fed tightening.
With markets already assessing the possibility of another Fed rate increase in October, the release may drive volatility across USD pairs, gold and equity indices.
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