FOMC to start its hiking cycle as early as in its next meeting?

There are anticipations that US Federal Reserve starts its hiking cycle in its December meeting, the market will be waiting for confirmation on the starting and the pace of its rate hike cycle.

There is a 74% probability assigned by Fed futures for a December rate hike and this week's data should suggest the pace of future rises.

"We forecast nonfarm payrolls to increase 200k (as consensus), the unemployment rate to fall one-tenth to 4.9% and average hourly earnings to be up 0.1% m/m. A solid print, as the one we expect, should confirm the start of policy normalization in December", says Barclays in a research note.

There is Fed chair person Janet Yellen's testimony before congress this week on Thursday, which mainly focuses on the economic outlook.

"The USD should continue its upward trend this week, as we expect the ECB to deliver further easing, Fed speak to support policy tightening and a solid job report and other data to confirm the strength of the US economy", added Barclays.