This week’s economic calendar features another heavy dose of Fed speak as well as several important data releases that will help to shape market participants’ views on the state of the economy. We have August JOLTS on Tuesday, ADP private payrolls on Wednesday & Sep Non farm Payrolls on Friday. We expect Sep NFP to be at 125k with unemployment rate at 4% leading Fed to focus on it's inflation mandate. Core PCE for Aug is due on Wednesday which we expect to come at 0.28% MoM leading to 3.3% YoY against Fed's median forecast of 3.4% for Q4CY26. Markets are currently pricing in 64% chance of a 25-bps rate hike in Oct meeting and total 35 bps of hike by Dec’26. We expect Fed to hike by 25 bps in Oct meeting and then maintaining a hold till Mar’27. On the middle east conflict, we see little possibility of a deal before the mid term US elections on 3rd Nov as Trump might want to wait out one more month and use a final round of bombing threat to get Iran agree to his demands. Iran on the other hand knows that they don’t have any leverage after 3rd Nov so they are trying to do a deal on their terms currently rather than wait after 3rd Nov. We see Brent continuing in the range of 95-108 for short term.
