Source: Tradingview

Last Friday’s better than expected Nonfarm Payroll report showed that the U.S. labor market remains tight despite the Federal Reserve’s bid to loosen it. The U.S. added 261K jobs in October, down from an upwardly revised level of 315K in September and above market expectations of 200K. The unemployment rate ticked higher to 3.7%, up from 3.5% last month, while expectations were for a rise of 3.6%. The latest U.S. employment report confirmed that policymakers have more work to do to cool the economy in their quest to tame inflation via demand destruction.

The NASDAQ 100 is likely trade higher on Monday, ahead of the potentially significant U.S. midterm elections on Tuesday and the release of inflation data on Thursday, which is the most important catalyst this week.

The midterm elections are taking place on Tuesday, with the polls suggesting that the Republican party could take control of the House of Representatives and possibly the Senate for the second half of President Joe Biden’s term. Republicans have picked up momentum in recent polls and a split government, which historically has been good for U.S. equity markets.

The U.S. Bureau of Labor Statistics is scheduled to release October’s CPI data on Thursday. Headline CPI is forecast to have risen 0.7% on a seasonally adjusted basis, with the annual rate seen easing to 8.0% from 8.2% in September. The core CPI is expected to clock in at 0.4% MoM and 6.5% YoY.