Futu Finance App has learned that as Federal Reserve Chairman Powell is set to deliver an important speech on the outlook for the American economy and the business environment this week, and the U.S. government will release the latest U.S. non-farm employment data this Friday, these two important events are extremely crucial for the entire financial market direction, especially regarding whether the highly bullish momentum in the recent red-hot Chinese stock market and the repeatedly hitting new highs in the U.S. stock market can continue. In addition, several Fed officials will also give speeches this week, and Powell's and these officials' remarks might to some extent reveal the Fed FOMC's intentions for another significant interest rate cut in November. The current financial market's bets on a 50-basis-point rate cut in November continue to heat up, with the probability of a 50-point cut versus a 25-point cut once being fifty-fifty.

The market's expectations for the Federal Reserve's second significant interest rate cut of 50 basis points to continue to rise largely depend on Powell's policy stance in the speech and the non-farm employment data. Powell's remarks on the outlook for the American economy and the Fed's policy prospects, and the "hawkish or dovish" policy stance, combined with the latest non-farm data indicating a higher probability of the American economy achieving a "soft landing" or a significant increase in the likelihood of an economic recession, are also crucial for whether the Fed can continue to cut rates by 50 basis points in November. Therefore, these two major events are crucial for the global financial market direction and overall volatility.

On Monday US Eastern Time, Federal Reserve Chairman Powell will discuss the outlook for the US economy at the National Association for Business Economics conference, and may even delve deeply into the Fed's monetary policy path. Later this week (late Friday Beijing time), the September US non-farm employment data will be officially released. Ahead of this non-farm release, economists' sentiment towards the US job market and the US economy is completely different from when the July non-farm data triggered the "Sam Rule" concept, this time economists generally expect the non-farm data to show a healthy labor market that is expanding at a slower pace.

According to a compilation of median estimates from economists following consultations with institutions, economists generally expect the world's largest economy to add around 0.146 million jobs in non-farm payrolls in September. This means that the September non-farm additions will be similar to the increase in August, bringing the three-month average job growth close to the lowest levels since mid-2019. This implies that despite the long-term pressure of maintaining high interest rates by the Fed, the crucial labor market of the US is experiencing a sluggish growth without falling into a pessimistic downward trend.

As per economists' expectations, the latest U.S. unemployment rate might continue to stay at 4.2%, indicating that the U.S. labor market and the U.S. economy still remain resilient. It is expected that the latest average hourly earnings may increase by 3.8% compared to the same period last year.

The US labor market expansion is easing - economists expect the non-farm payrolls to increase by 0.146 million.

Recent labor unrest in the USA indicates that the non-farm payrolls report to be released on Friday could provide Federal Reserve policymakers with a clear and rational interpretation of the US labor market before their meeting in early November. Workers at Boeing, a US aerospace industry giant, began a large-scale strike in mid-September, while dockworkers along the Atlantic and Gulf Coasts have threatened to go on a large strike starting from October 1.

In addition to the highly anticipated monthly non-farm payrolls report that global investors are focusing on, the US job vacancy data on Tuesday is also important for investors. They may glean insights into the latest overview of the US labor market before the non-farm figures are released. It is expected that this data will show job vacancies in August close to the lowest level since early 2021. Additionally, the market will also focus on resignation rates and dismissal rates to gauge the potential cooling of US labor demand.

"We expect a strong increase in non-farm employment numbers in September, which may even rekindle market expectations of the US economy not having a 'hard landing.' However, we believe that the overall data may somewhat exaggerate the strength of the labor market, partly due to the exaggeration associated with the Bureau of Labor Statistics' 'birth-death' model, and partly due to temporary seasonal effects." The Bloomberg Economics team said in a report.

Industry surveys will also help reveal the specific recruitment situation in the US private sector to understand whether the US economy can continue to grow with strong resilience. The Institute for Supply Management (ISM) will release the US Manufacturing PMI for September on Tuesday, followed by the Services PMI index two days later. These industry surveys include employment indicators, which are crucial for investors to assess the US economy.

The recent popular A-shares and record-breaking US stocks will face severe tests.

Last week, the investment heat in the A-share market led globally, especially with the assistance of foreign hedge funds, the SSE Composite Index regained the seemingly distant 3000 points in just a few days. Behind this is based on a series of policy combinations by the Chinese government that exceeded expectations, and this series of policy combinations is based on the unexpectedly 50 basis points rate cut by the Federal Reserve, opening up space for monetary policy operations. The Fed's rate cut policies usually affect global capital flows, especially attracting foreign capital to flow back into emerging markets (including the Chinese market). The continuous rate cuts by the Fed, especially substantial ones, may lead to continued capital inflows from Wall Street to China and other emerging markets, benefiting A shares.

The importance of non-farm data lies in its impact on expectations for the Federal Reserve's policy and the US economic outlook. Therefore, this week, Federal Reserve Chairman Powell's tone in his speeches, as well as the Fed's rate cut expectations and the possibility of a 'soft landing' reflected by the non-farm data, are crucial for the future trends of A-shares and foreign capital movements. In addition, non-farm payroll is the core economic indicator that Fed policymakers focus on, largely determining whether the US economy can continue its resilient growth pace and whether very important consumer spending can sustain strong growth for the US economy.

In the US stock market, the 'bull market trend' spreading across various sectors continues, with the benchmark index S&P 500 index recently hitting multiple historical highs, also benefiting from the unexpected 50 basis points rate cut by the Federal Reserve, along with the warming expectation of a 'soft landing' brought by the significant rate cut. Overall, investors in the global stock markets prefer a 'neither good nor bad' non-farm data — this data could significantly boost confidence in the 'soft landing' of the US economy, while also maintaining the expectation of a 50% possibility for a 50 basis points rate cut. Although a significantly lower-than-expected non-farm data could boost the expectation of a 50 basis points rate cut by the Federal Reserve, it could also significantly increase the market's expectation of a US economic downturn, so overly pessimistic non-farm data could lead to at least a short-term depression in the global stock markets.

Looking at the global outlook, data this week may show a further slowdown in global inflation.

In Canada, the housing sales data of several of the largest cities in Canada — Toronto, Calgary, and Vancouver, may provide insights into how the important component of Canadian inflation — the Canadian real estate market — has developed after a series of rate cuts by the Bank of Canada.

Elsewhere in the world, it is expected that many data will show a slowdown in global inflation (from the Eurozone to Turkey and South Korea), as well as China's business surveys are the focus of investors.

China will release a series of Purchasing Managers' Index reports on Monday. Recently, several government departments in China have jointly implemented unusually wide-ranging liquidity-boosting policies and other stimulus measures, driving A-shares and Hong Kong stocks to surge rapidly last week. The latest official manufacturing PMI may see a slight increase, while the Caixin index is expected to remain above the boom-bust line.

The Manufacturing Purchasing Managers' Index (PMI) for Indonesia, Malaysia, Thailand, Vietnam, and the Philippines will be released the following day.

In Japan, Yoshihide Suga is expected to be appointed as the new Prime Minister in Tuesday's parliamentary vote. The Bank of Japan's 'Tankan survey' may show that large enterprises remain optimistic about business sentiment in the third quarter, while small manufacturers are slightly pessimistic. Companies are expected to slightly revise their capital expenditure plans upward.

It is expected that South Korea's inflation will continue to cool down in September, providing additional impetus for the South Korean central bank to consider a rate cut in October. Price growth in Pakistan may have slowed to the lowest level since early 2021. Australia, Sri Lanka, and South Korea will also release trade data this week.

Eurozone inflation data will be the focus. Last week, the inflation rates announced by France and Spain were unexpectedly lower than the European Central Bank's target of 2%. The inflation data reports for Germany and Italy on Monday, as well as the overall inflation data report for the Eurozone on Tuesday, will be closely watched by the financial markets.

The inflation rate in the Eurozone this month may fall below 2%.

With traders now expecting the European Central Bank to announce a further 25 basis point rate cut at its monetary policy meeting in October, economists are also starting to revise their forecasts, expecting further rate cuts. These inflation data will be the key data focused on by policymakers, who had previously been more inclined to take further rate cuts in December rather than October.

The European Central Bank's rate cut process is also a major event of global investors' focus, with top European financial giants likely to increase their investment in global financial markets during the ECB rate cut cycle, especially in terms of incremental fund inflows into emerging markets and the USA stock markets. The liquidity boost brought by the ECB's rate cuts is crucial for stock markets with high international capital concentration, such as the Japanese and South Korean stock markets, as well as the Hong Kong stock market.

Turkey, which has historically seen remarkably high inflation, may see its inflation rate slow to 48% in September, a figure to be released on Thursday. This expected inflation rate will be below the country's main interest rate, currently at 50%. Turkey's inflation rate is very high compared to the global average, but having it below the main interest rate would be a first for the country in many years. While progress has been made in combating inflation, Turkish officials still need to work towards achieving the goal of inflation below 40% by the end of the year.