Markets enter the week reassessing the U.S. interest-rate outlook after September employment data showed a modest increase of 29,000 in nonfarm payrolls and an unemployment rate of 4.2%. The report provides a softer labour-market signal ahead of the Federal Reserve’s next meeting, although inflation remains elevated and the Fed’s September projections still point to a relatively restrictive policy path. The Federal Reserve raised the federal funds target range by 25 basis points to 3.75%–4.00% at its September meeting.
This week, investors will look for confirmation of the economy’s underlying momentum rather than another major inflation release. September ISM Services PMI on Monday will provide the first major U.S. activity signal, followed by the FOMC minutes on Wednesday. The same day, the U.S. Energy Information Administration will publish its latest energy-market data, while Thursday brings initial jobless claims and a speech from Fed Governor Christopher Waller. Friday’s preliminary University of Michigan consumer sentiment survey will close the week. In Europe, the ECB will publish the account of its September monetary policy meeting on Thursday.
Key Points to Watch
U.S. Services Activity
September ISM Services PMI on Monday will provide an early reading on business activity, employment and price pressures in the U.S. services sector.
FOMC Minutes
The minutes of the September 15–16 meeting on Wednesday will provide more detail on the debate behind the Fed’s latest rate decision and could influence expectations for the October meeting.
Fed Communication
Governor Christopher Waller is scheduled to speak on Thursday, giving markets another opportunity to assess how policymakers view inflation, employment and the appropriate policy path.
U.S. Labour Market
Initial jobless claims on Thursday will provide a more timely indication of labour-market conditions following the weak September payroll increase.
Gold, Oil and Major FX
The dollar, Treasury yields and gold will remain sensitive to changes in Fed expectations, while oil will receive additional catalysts from the EIA’s Short-Term Energy Outlook and weekly petroleum data.
Fed Minutes: Policy Debate Comes Into Focus
The Federal Reserve will release the minutes of its FOMC meeting on Wednesday, 7 October at 2:00 p.m. Eastern Time. The minutes will provide a more detailed account of policymakers’ discussion surrounding the decision to raise the federal funds target range by 25 basis points to 3.75%–4.00%. The next FOMC meeting is scheduled for 27–28 October.
The minutes arrive after the September employment report showed only 29,000 payroll gains and a rise in unemployment to 4.2%. This makes the balance between inflation and employment particularly important. The Fed’s September projections showed a median federal funds rate of 4.1% at the end of 2026, alongside a 3.7% PCE inflation projection and a 4.1% unemployment projection. If the minutes reveal greater concern about labour-market weakness, markets could increase expectations for a less restrictive policy path. If policymakers remain primarily focused on inflation, the dollar and yields could retain support.
U.S. Economy: Services Activity Takes Centre Stage
The U.S. services sector will provide the week’s first major economic test on Monday, 5 October, when the Institute for Supply Management releases its September Services PMI. The August reading stood at 55.4, marking the 26th consecutive month of expansion. However, the August report also showed a contrasting picture beneath the headline number: the Business Activity Index rose to 61.7 and New Orders reached 60.9, while the Employment Index remained in contraction territory at 47.8. The Prices Index increased to 72.6, its highest level since August 2022.
A strong services reading, particularly if accompanied by elevated prices, could reinforce expectations that the Fed will remain cautious about further easing and could support the dollar and Treasury yields. A weaker activity reading combined with softer employment and price components could strengthen the argument that the economy is losing momentum, potentially supporting bonds and gold.
Europe & FX: ECB Accounts and Dollar Direction
The European Central Bank will publish the account of its monetary policy meeting on Thursday, 8 October at 13:30 CET. The account will provide additional detail on the Governing Council’s assessment of financial conditions, inflation, economic activity and the risks surrounding monetary policy. The ECB’s next monetary policy meeting is scheduled for 28–29 October, making the account relevant for expectations heading into that decision.
For FX markets, EUR/USD will remain primarily driven by the relative outlook for U.S. and euro-area monetary policy. A more cautious Fed interpretation could weaken the dollar and provide support for EUR/USD, while stronger U.S. activity or a more hawkish reading of the FOMC minutes could have the opposite effect. USD/JPY will remain sensitive to U.S. Treasury yields and expectations for Bank of Japan policy, while GBP/USD will continue to respond to dollar movements and broader risk sentiment. USD/CHF could also become more active around the ECB accounts and changes in European bond yields.
Asia-Pacific: China Holiday and Japan Data
China’s Golden Week holiday will keep mainland Chinese markets closed through Monday, 5 October, with trading scheduled to resume on Tuesday, 6 October. This creates a quieter start to the week for China-sensitive markets, although the Australian dollar and commodities can still react to global risk sentiment and developments in the U.S. dollar. Japan will provide several economic releases during the week, including current-account and trade-related data on Wednesday.
The main regional FX focus will remain on USD/JPY and AUD/USD. USD/JPY will continue to reflect the interaction between U.S. yields and expectations for Japanese monetary policy, while AUD/USD can be influenced by changes in global risk appetite and commodity prices. With no major Reserve Bank of Australia policy decision this week, broader movements in the dollar and global markets are likely to remain important drivers for the Australian currency.
Commodities: Gold and Oil in Focus
Gold will remain closely tied to the direction of U.S. Treasury yields and the dollar as traders reassess the Fed’s policy outlook. The weak September payroll increase could support expectations for a less restrictive policy path if the FOMC minutes and subsequent economic data reinforce concerns about labour-market momentum. Lower yields and a weaker dollar would generally provide a more supportive environment for XAU/USD, while stronger services activity or a hawkish interpretation of the Fed minutes could put renewed pressure on bullion. The preliminary October University of Michigan survey will also be watched for changes in consumer inflation expectations.
Oil markets will receive two important catalysts from the U.S. Energy Information Administration. The Short-Term Energy Outlook is scheduled for release on Tuesday, 6 October, followed by the Weekly Petroleum Status Report on Wednesday. The latter provides updated information on U.S. crude oil and petroleum-product inventories, while the monthly outlook covers the broader energy-market balance. Changes in inventory expectations, oil-demand projections and geopolitical developments could create volatility in WTI and Brent during the week.
U.S. Labour Market and Consumer Sentiment
Initial jobless claims on Thursday will provide another near-term indication of labour-market conditions following the September employment report. The latest payroll data showed nonfarm employment increased by only 29,000 in September, while unemployment rose to 4.2%. A sustained deterioration in labour-market indicators could increase pressure on the Fed to consider a less restrictive policy stance, whereas stable claims would provide some evidence that the weakness in the payroll report may not represent a broader deterioration.
The preliminary October University of Michigan Surveys of Consumers will then provide the final major U.S. sentiment signal of the week on Friday at 10:00 a.m. Eastern Time. September consumer sentiment ended at 48.1, down from 51.7 in August, while the survey indicated continued concern about economic conditions. The preliminary October figures will be watched for evidence of whether household sentiment is stabilising or deteriorating further, as well as for changes in inflation expectations.
Conclusion
The week of 5–9 October will centre on the U.S. economic outlook and expectations for the Federal Reserve’s October meeting. The ISM Services PMI and FOMC minutes will be the key events, followed by Fed commentary and consumer sentiment data. Markets will assess whether recent signs of softer employment are becoming broad enough to justify a less restrictive policy outlook or whether resilient services activity and persistent price pressures will keep the Fed cautious.
For traders, the dollar will remain the main cross-market driver, with EUR/USD, GBP/USD and USD/JPY sensitive to changes in Treasury yields and Fed expectations. Gold will continue to track the dollar and rate outlook, while WTI and Brent will respond to the EIA’s energy outlook, U.S. inventories and geopolitical developments. A weaker U.S. growth and labour-market outlook could pressure the dollar and support gold, while stronger activity could reinforce dollar strength and limit gains in precious metals.
