With rate futures broadly settled following the late summer re-pricing in August, this week’s US payrolls data remains the key pivot point as the Fed embarks on its rate cutting cycle. While bets on a 50 bps cut in September have been pared back by markets in recent weeks, there still remains an outside chance that the Fed could decide on a larger cut if the payrolls data deteriorate further in August. However, the weight of evidence from lead indicators, such as jobless claims and employment surveys, suggest that the US economy is still adding jobs, albeit at a more moderate pace than H1 2024.