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Week Ahead: US Jobs Strengthen Fed Hike Bets as CPI Looms

Key Takeaways -August US payrolls rose by 162,000, well above expectations, while unemployment remained at 4.1%, strengthening the case for keeping monetary policy restrictive. -PPI on 10 September and CPI on 11 September are the next major US releases before the Fed’s 15–16 September meeting. -Hotter inflation could keep Treasury yields and the US dollar supported, while adding pressure to gold and other rate-sensitive assets. -Softer inflation could ease expectations for further tightening and give gold and other rate-sensitive markets more room to recover. -Traders are watching USDX, XAUUSD, EURUSD, GBPUSD, USDJPY, S&P 500 and USOil as markets adjust to the changing macro backdrop. Markets enter the week after a stronger-than-expected US employment report shifted attention back towards the possibility of further monetary tightening. The immediate reaction was visible across markets, with Treasury yields and the US dollar moving higher while gold weakened. The focus now moves beyond employment towards inflation, with two major price reports due before the Federal Reserve meeting. Why Traders Are Watching Global Markets The jobs report has changed the starting point for this week’s trading. August payrolls increased by 162,000, compared with expectations of around 55,000, while unemployment held at 4.1%. Earlier payroll figures were also revised higher. However, the labour market is only one part of the Fed’s decision. Average hourly earnings rose 3.1% year on year, leaving policymakers with a reason to examine whether price pressures are continuing to moderate before deciding on further action. That makes this week’s inflation data particularly important. PPI may provide an early indication of price pressures, while CPI will offer a broader reading just days before the Fed meeting. Key factors influencing markets include: -US Inflation: PPI and CPI will provide the next evidence on whether price pressures are easing or remaining persistent. -Federal Reserve Policy: The September decision will depend on how policymakers balance employment strength against inflation. -Treasury Yields: Bond yields could respond to changes in the expected policy path, influencing gold and equity valuations. -US Dollar: Changes in rate expectations could drive further moves across USD-related currency pairs and gold. -Energy Prices: Elevated oil prices remain an additional source of inflation risk. Key Movements of the Week USDX USDX found resistance around 99.50 following the stronger US employment data. -A sustained move above 99.50 could keep the recent dollar recovery in focus. -A decline below 98.788 could increase downside pressure, with 98.455 acting as a deeper support reference. EURUSD EURUSD remains sensitive to changes in the US-European rate outlook and broader dollar demand. -A move above 1.1640 could bring 1.16588 and 1.17108 into focus. -Continued dollar strength could push the pair towards the 1.1530 support area. GBPUSD GBPUSD is balancing domestic growth expectations against broader US dollar movements. -A break above 1.3540 could open the way towards 1.3575. -Weakness below 1.3440 could bring 1.3385 into focus. USDJPY USDJPY remains linked to Treasury yields and the interest-rate differential between the US and Japan. -A move higher could keep 158.75 in focus as a potential resistance area. -A deeper pullback could bring 155.215 into focus. XAUUSD Gold remains under pressure after the rise in Treasury yields and the US dollar following the jobs report. -Gold could consolidate while traders await the upcoming inflation releases. -A move towards 4,600 would keep the potential recovery scenario in focus. S&P 500 The S&P 500 remains elevated, with the direction of Treasury yields likely to remain an important influence on valuations. -Holding above 7,777.15 could support another move towards 7,825. -A break below 7,777.15 could increase the risk of a pullback. USOil USOil remains sensitive to geopolitical developments and their potential impact on inflation expectations. -A break above 93.894 could support further upside momentum. -A move towards 94.95 would keep the broader upside scenario in focus. Bottom Line The market has moved from assessing the strength of US employment to determining what that strength means for inflation and monetary policy. PPI and CPI are now the key events to watch. Evidence of persistent price pressure could reinforce the recent move in yields and the dollar, while softer inflation could give markets reason to scale back expectations for further tightening. The reaction across USDX, XAUUSD, EURUSD, GBPUSD, USDJPY, S&P 500 and USOil could provide a clearer picture of how markets are positioning ahead of the September Fed meeting. For a deeper look at this week’s economic catalysts, technical levels and market outlook, read the full article in the "learn more" button below.

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Publication date:

2026-09-07 07:39:44 (GMT)

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