In the European session, there are no economic events planned, which may lead to stable market conditions before next week’s labor market reports. Traders are keeping an eye on how markets respond to updates from the Jackson Hole symposium. In the American session, traders will look out for the US Durable Goods Orders and the Consumer Confidence report. The durable goods data often does not affect the market much because it can be volatile, so the focus is primarily on consumer confidence. It is expected to slightly drop to 96.2 from 97.2.

Consumer Confidence Report

The last report showed that consumer confidence had improved, especially in the expectations index. Recent trends indicate good economic progress, as shown by the latest US PMI numbers. While consumer confidence can influence the markets, significant changes in the data are necessary for lasting effects. This week, the main attention will be on US Jobless Claims on Thursday, with key labor market data, including the NFP report, coming next week. Central bank speakers like Fed’s Barkin at 12:30 GMT, BoE’s Mann at 16:00 GMT, and BoC’s Macklem at 18:45 GMT will share their insights. All will speak from a neutral standpoint, with one being an active voter. Today, the spotlight is on the US Consumer Confidence report, which might challenge the current market trend. Last week, the Federal Reserve’s hawkish stance at Jackson Hole led to a slight pullback in Treasury yields and the dollar. A surprise in consumer confidence could either renew that trend or cement the market’s current cautious approach. We anticipate a consumer confidence reading close to the expected 96.2, continuing the gradual decline from the 102.0 peak seen in May 2025. A result below 93 or above 99 could spark a sustained market response. Otherwise, focus will quickly shift to more significant data releases ahead.

Labor Market Data

For derivatives traders, the lead-up to next week’s important labor data is marked by expectations of volatility. The VIX index is around a low of 14, indicating that options markets do not expect a major surprise from today’s report. This situation may favor strategies benefiting from a stable market, though there is a risk of being caught off guard if the consumer confidence data varies greatly. The key event remains the upcoming labor market data, starting with Thursday’s Jobless Claims and leading to next week’s NFP report. Following July’s solid non-farm payroll increase of 195,000, another strong report for August could pressure the Fed to uphold its careful stance. This jobs data will significantly influence expectations surrounding the Fed’s policy decision in November. We will also tune in to comments from Fed speaker Barkin. However, since he is a non-voter, his remarks are unlikely to have a strong impact unless he indicates a major change in perspective. More critical for currency traders could be the speech from Bank of Canada Governor Macklem, which might affect CAD-related pairs. These speeches will be closely monitored for any new insights on the future direction of interest rates. Create your live VT Markets account and start trading now.

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