Fra Danske Bank:
Sofie Liv Petry, [email protected] , Assistant Analyst
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The US Jobs Report, the week’s most important data release, is due. We expect nonfarm payrolls at +65k, slightly above consensus, and an unchanged unemployment rate at 4.1%, suggesting a still-tight labour market. We expect average hourly earnings to rise 0.3% m/m. A solid report could put further pressure on the Fed to hike rates.
In Germany, July factory orders are released. Orders have recovered in recent months after the April slump, rising 3.1% m/m in June, though the increase was partly driven by large orders and the underlying gain was more modest.
State elections in Germany start this Sunday with Saxony-Anhalt, the first of three votes in eastern Germany this month and a key test of AfD momentum ahead of 2027. The AfD polls around 42% versus CDU at 23%. With FDP and BSW likely below the 5% threshold, wasted votes could give AfD an outright majority despite securing well under half the vote, though all mainstream parties rule out a coalition. We see no direct market impact, only a marginal increase in Germany’s political risk premium: it does not directly affect the federal government, and an AfD-led state would hold just 4 of 69 Bundesrat seats.
Economic calendar
In commodities, Brent crude increased above USD 97/bbl yesterday, reaching its highest level since mid-July. Prices increased on the back of tighter supply conditions, as the slower release of US strategic reserves compared to over the summer has made the reduced flow of oil through the Strait of Hormuz more apparent. On the demand side, the weaker USD and still solid global growth is adding further upward pressure on the oil prices.
On the wires, Fed’s Waller said he is inclined to support keeping the policy rate unchanged at the September meeting if August inflation data shows continued progress. However, he also noted that if inflation comes in hot, he would consider a September rate hike. The comments put further emphasis on the upcoming inflation release as key for the Fed’s near-term policy decision. The USD weakened slightly after the remarks, while market pricing for a September hike moved closer to a 50/50 call from around 60/40 in favour of a hike prior to the comments.
In the US, the ISM services index rose to 55.4 in August (cons: 54.2, prior: 54.1), coming in stronger than expected and pointing to solid momentum in the services sector. The details were also firm, with business activity, new orders and prices all increasing notably, while the employment index ticked up only slightly and remained in contractionary territory. The final S&P Global services PMI was revised slightly lower, but still showed remarkable strengthening compared to previous months. Overall, both reports support the notion of strong aggregate demand.
Also in the US, the Challenger layoff report for August showed planned job cuts increased to 53k in August, compared to a two-year low in July of 33k. AI-related cutoffs accounted for merely 7% of announced layoffs, down from around a third in recent months. Layoff levels continue to be low in a historical perspective.
In the euro area, the final services PMI edged down to 51.6 in August (flash: 51.7), while the composite PMI came in at 52.0 (flash: 52.1), confirming steady private sector growth from the flash release. Demand remained solid, while price pressures stayed elevated ahead of next week’s ECB meeting, where we and markets expect a 25bp hike.
In the UK, the final services PMI increased to 52.5 in August (flash: 52.8, prior: 52.1), confirming a second consecutive month of expansion and pointing to resilient demand. Price pressures picked up, which remain a focus for the Bank of England.
In Sweden, the flash release showed that services PMI increased to 55.8 in August (prior: 54.2), confirming that the services sector remains on a strong trend. The improvement was broad-based but primarily driven by higher business volume. The price component declined and is starting to approach a more normal level, which we did not see in the manufacturing PMI earlier this week. We have also adjusted our Riksbank call and now expect 25bp of hikes in November and February, respectively.
Equities: Global equities had their strongest day since early August, rising 0.9%. While defensives led on Tuesday and Wednesday, yesterday saw a clear rotation into cyclicals, with all 7 cyclical sectors outperforming defensives. Financials and com services rose about 1.4% each. In the US, S&P500 rose 1.1%, Nasdaq 1.4% and Russell2000 was up 0.5%. Overnight, both Asian equities and US futures are in green.
FI and FX: European bond yields rebounded yesterday with 10Y German government bonds declining some 3bp, while France declined almost 5bp. It was a parallel shift downwards across the yield curves. In the US there was also an initial decline on the back of Fed Wallers comments, but then yields began to rise in the afternoon and 10Y Treasuries ended unchanged.
The yen continued to strengthen versus the dollar and moved towards the 155-level, while the euro moved above the 116-level versus the dollar.
Yesterday, we published our ECB preview, see ECB Preview – Hiking, not guiding , 3 September. We expect a 25bp hike, which is the consensus view and priced by the market. Markets will be looking at comments for future hikes.
See also our in-depth FI and FX morning comment *
Reading the Markets Sweden – 4 September
ECB Preview – Hiking, not guiding , 3 September
Executive Briefing – Steady growth despite headwinds , 3 September
Nordic Outlook – New sources of growth , 3 September
Norway: Inflation and growth , 2 September
Geopolitical Radar: Islamic NATO in the making? , 2 September
Euro Area Macro Monitor – Growth resilience takes rate cuts off the table in 2027 , 2 September
Report completed: 4 September 2026, 07:00 CEST
Report first disseminated: 4 September 2026, 07:30 CEST
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Hurtige nyheder er stadig i beta-fasen, og fejl kan derfor forekomme.
