The Week Ahead: US payrolls, govt shutdown worries + Tesco, Greggs and Nike to report earnings

US nonfarm payrolls provide the highlight at the end of a busy week for economic data, while earnings season is just about to get started as October starts.

The monthly US labour market report will provide the steer on the likelihood of further rate cuts this year, but before this there is a slew of employment data in the form of the JOLTS job openings report, ADP payrolls data and weekly unemployment claims. Eurozone inflation data will be important for assessing what the European Central Bank is likely to do next.

Worries about a government shutdown are also in focus. The White House is drafting a request for federal agencies to prepare ‘reduction in force’ plans in case Congress doesn’t pass a spending bill before 1 Oct.

We'll be keeping an eye out for Tesla delivery numbers, too.

For earnings we are looking at Nike, Tesco, JD Wetherspoon and Greggs.

Monday, 29 September

UK lending data will show whether there is any life in the mortgage market as consumers look ahead to potential changes in the Budget. We’re also set to hear from several FOMC members and Germany’s central bank chief amid a fairly quiet session for economic data.

Tuesday, 30 September

China manufacturing and non-manufacturing PMIs will let investors know the world’s second-largest economy is faring. The Reserve Bank of Australia is expected to leave interest rates on hold with attention on whether policymakers signal a cut is coming in November. Revised UK GDP figures for Q2 are due but this is not likely to move the needle on gilts or sterling. German preliminary CPI inflation data is due ahead of a speech by European Central Bank president Christine Lagarde. In the US, JOLTS job openings and the Conference Board’s consumer confidence survey are likely to provide some narrative spin on the state of the US economy and what the Fed may do next.

Nike earnings will be in focus – can it recover some momentum with shares at 2-month lows? Expectations have been reset but tariffs remain a problem. Sales are seen falling 7%.

Wednesday, 1 October

Congress needs to approve a spending bill by today to avoid a government shutdown.
Eurozone inflation data will be the main event on the European session – is there further cooling that will allow the ECB to cut rates again this year? In August the CPI inflation rate was back on target at 2.0%.

In the US session, we’ll be paying close attention to the ISM manufacturing survey – particularly the prices data for clues as to the direction of inflation. ADP employment data will watched ahead of Friday’s official payrolls report.

Have we reached peak Greggs? Earnings from the baker will be one to watch. Shares are at their lowest in five years after a profits warning in July – first half profits slumped 14% as sales growth cooled faster than a sausage roll due to the hot summer.

Thursday, 2 October

US weekly jobless claims data is the most crucial piece of fast-moving data for the market. Last week was surprisingly strong, falling to 218,000, well below the estimate. This sparked a sell-off in bonds, pushing up yields and sending stocks down on expectations that it could see the Federal Reserve refrain from further rate cuts.

On the earnings calendar, watch for Tesco, which has been putting a strong showing of late with the shares hitting their highest in 12 years. Recent Kantar data suggests Tesco has continued to grow market share – expect strong numbers.

Friday, 3 October

Nonfarm payrolls is the main event: the weak jobs report for August sealed the deal on the Fed’s rate cut in September. But more recent data has been positive, clouding the market outlook on how many cuts the FOMC will go for this year. August saw just 22k jobs added, well below forecast, whilst the unemployment rate edged up to 4.3%. Markets expect just 39,000 jobs were added in September, with unemployment steady from the month before.

JD Wetherspoon reports earnings. It’s been slashing price and opening new pubs and shares have risen about 11% this year. National Insurance and minimum wage increases weigh and the Budget looms in November.