Markets look to US jobs and ECB

This week brings the latest report on the US jobs market – the nonfarm payrolls report, which may sway policymakers at the Federal Reserve as they consider lifting rates. Investors will also scrutinise comments from the European Central Bank as some strategists call for additional easing.

Economists project that employers added 220,000 jobs in the US in August, roughly in line with the 215,000 jobs created the previous month. The report, to be published on Friday, is also expected to show the unemployment report dipped to 5.2 per cent from 5.3 per cent.

Recent market volatility has cast a cloud over the timing of the Federal Reserve’s first rate rise since the financial crisis.

Ahead of his keynote speech in Jackson Hole, Wyoming, this weekend, Stan Fischer, vice chair of the Federal Reserve told CNBC:We have a little over two weeks before we make a decision. We have time to wait and see the incoming data. If a decision is close it will be influenced by data that’s come in recently.

Investors await the European Central Bank’s latest rate decision on Thursday. The ECB is expected to keep its main refinancing rate unchanged at 0.05 per cent. President Mario Draghi will hold a press conference after.

“We expect the ECB to ease monetary policy further before year-end as a result of what we consider to be an unwarranted tightening of financial conditions,” Philippe Gudin, an economist at Barclays said. “Next week, we expect ECB President Mario Draghi to prepare markets for such a decision and we think he could even announce an extension of the programme beyond September 2016.”

Monetary policy decisions from central banks in Australia, Brazil and Sweden are also expected in the coming week.

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