The economic calendar for the coming week is packed with important macroeconomic and political events. As a rule, the first week of each month is informative — and accordingly volatile — for EUR/USD, and November will be no exception.

Let's review the most important macro releases next week that will almost certainly strongly influence the euro/dollar pair.

The US labor market

Against the backdrop of resilient US growth and rising price pressures, the US labor market remains the weak link that is constraining the Federal Reserve's more hawkish ambitions. That is why the November sequence of labor reports will be particularly important for the greenback.

On Tuesday, JOLTS data will be published — the number of job openings in September — which lets us assess labor demand dynamics. The consensus calls for a small rise to 7.10 million from August's 7.079 million. A stronger-than-expected increase would support the greenback by easing concerns about labour-market cooling.

On Wednesday, ADP takes the baton: October private-sector employment is expected to rise by about 65,000 after a 90,000 gain in September. That implies a slowdown in hiring, which could amplify market worries ahead of Friday's Non-Farm Payrolls. Note, however, that ADP should not be treated as a precise rehearsal for the official NFP — ADP and NFP often diverge due to differences in methodology and coverage — so the initial market reaction to ADP can be misleading.

The week's main macro event is Friday, 6 November, when the official US labour-market data will be released. Most analysts forecast a gain of about 65,000 non-farm payrolls in October, unemployment steady at 4.2%, and average hourly earnings rising 0.3% month-on-month after a 0.1% rise in September.

Recall that in September US payrolls rose by only 29,000, and July/August were revised down by a combined 60,000. At the same time, the participation rate edged up from 61.6% to 61.8% (after two months of decline), while unemployment rose from 4.1% to 4.2%. That suggests the unemployment rise accompanied an expansion in labor supply. Therefore, a decline in unemployment in October would be more meaningful for the dollar if the participation rate does not fall.

Broadly speaking, the consensus 65,000 payroll increase represents a partial recovery after September's miss. To erase the negative impression from the prior report, dollar bulls need a much stronger payroll print (100k+), ideally accompanied by upward revisions to prior months and an acceleration in wages. Such an outcome would reinforce expectations for Fed rate hikes not only in December but also early next year. If Non-Farm Payrolls are weak again, markets may doubt the Fed will raise the policy rate more than once in the foreseeable future.

ISM Indices

The NFP report will be published on Friday, but overall trader sentiment will begin to form earlier, starting Monday when the ISM manufacturing index is released. According to forecasts, the manufacturing PMI in October should essentially hold near September's level — a slight rise to 54.7 is expected after 54.5. Two days later, on Wednesday, the ISM services index will be published; here a modest dip in the headline reading is forecast, to 54.8 from 54.9.

Both indicators are expected to remain above the 50-point threshold, i.e. in expansion territory.

But, as they say, the devil is in the details. Traders should pay particular attention to the employment, new-orders and prices-paid components. For example, in September the prices-paid index was 77.9 in manufacturing and 74.0 in services (quite strong readings), while employment in the services sector barely stayed in expansion at 50.1. The combination of expensive inputs and cautious hiring reflects the contradictory nature of the current fundamental picture.

By the way, preliminary U.S. PMIs published the week before last point to continued robust demand: the composite PMI for October was 57.6, and selling prices rose at the fastest pace since August 2022. Of course, you cannot equate PMI and ISM results one-for-one (they differ in methodology and sample), but if the ISM indices confirm the trends seen in the PMI reports, the greenback will receive clear support.

Euro-area CPI

For the euro, the main event next week is the preliminary October inflation release, due Wednesday, November 4. Headline consumer prices are expected to tick up slightly to 3.9%, reflecting the continued upward dynamic (September recorded 3.8 after August's 3.2). Core inflation, excluding energy and food, is forecast to remain at 2.5%.

Pay special attention to the core CPI. Recall that at the October European Central Bank meeting the bank left rates unchanged: on the one hand the central bank acknowledged rising energy-price risks, while on the other it stressed the relative stability of core inflation and only moderate wage pressure. Therefore, an acceleration of the core index would bolster the hawks' case and strengthen arguments for a December tightening. Conversely, if core inflation holds steady or slows, that would allow the ECB to act more cautiously even if headline CPI rises.

Last week's German inflation report adds to the uncertainty about euro-area CPI dynamics: in October Germany's headline annual CPI unexpectedly fell from 3.3% to 2.8%, and core CPI from 2.4% to 2.1%. On one hand, that suggests a softer euro-area outcome — particularly for core inflation. On the other hand, it is too early to draw definitive conclusions: accelerating price growth in France and Italy could offset Germany's decline.

Conclusions

In my view, the main intrigue next week is whether U.S. labour-market data will confirm the resilience of the American economy. Strong NFPs combined with strong ISM readings would allow EUR/USD sellers to retake the initiative and test support near 1.1130 (the lower Bollinger-Band on the D1 timeframe).

In addition, the U.S. midterm elections on Tuesday, November 3, will materially affect the dollar and, therefore, EUR/USD. If Republicans retain control of both chambers, the greenback could receive extra support on expectations of new fiscal stimulus, higher U.S. yields and greater inflationary pressure. However, such an outcome could also raise concerns about a larger U.S. fiscal deficit, which would partly limit the positive effect for the dollar.

If Democrats win a majority in at least one chamber (most likely the House of Representatives), the White House's legislative scope would be constrained. That scenario could weaken the greenback because it would reduce the probability of large new fiscal initiatives.