Likely, this short 4-day Global Week Ahead will be pre-occupied with happenings in the USA.

First, there are NAFTA negotiations. These are overheating at the moment. China tariff talk tensions also look likely to escalate into more actual tariff hikes by the USA.

After that, Friday’s U.S. nonfarm payroll and wage growth estimates for August should be the remaining top trading events. The call is for about +180K for August’s U.S. nonfarm job adds.

As for the rest of the world? I count numerous important monetary policy decisions happening outside the USA this week. None of the central bankers are looking for a change in rates, which is telling.

1. Banco Central de Chile is not expected to alter its policy overnight rate target on Tuesday. Within the Bloomberg consensus, only one out of nine forecasters expect a hike.
2. Consensus unanimously expects the Reserve Bank of Australia to keep its cash target rate unchanged at 1.5% on Tuesday.
3. The Bank of Canada should stay pat at 1.5% on Wednesday.
4. Bank Negara Malaysia is also expected to keep its overnight policy rate on hold at 3.25% on Wednesday.
5. Sweden’s Riksbank is expected to hold its policy rate at -0.5% on Thursday.

There is worry growing outside the USA on the U.S. dollar’s direction and on the strength of global GDP expansions. South Africa is now in a bona fide recession.

Next, to elaborate on all of this, I reproduced Reuters’ latest five big world market themes — aka those happening outside the USA.

These are the ones most likely to dominate thinking of investors and traders. I kept them in order of importance for equities.

(1) A big U.S. nonfarm jobs report on Friday is the week’s top catalyst

President Trump’s tariff war has cast a shadow over all economic data releases lately, including the biggest market-mover of them all: the U.S. jobs employment report. Friday offers a fresh chance to see if the brewing tensions have had any impact on hiring or not.

The narrative a month ago, when July’s employment and earnings figures were released, was about how rising tensions between Washington and its trade partners, especially China, might have hurt job creation. The answer was not much. The 157K jobs added was pretty healthy and at 3.9%, the unemployment rate was 0.1% above May’s 18-year low.

Friday’s figures are expected to show a gain of +180K new jobs in August, just as some of the trade war clouds appear to be dissipating. A bilateral trade deal looks sealed with Mexico. Should Canada sign on, the president will trumpet his rescue of the 24-year-old North American Free Trade Agreement.

Manufacturing jobs are also expected to have risen in August, following July’s biggest gain in seven months. If the labor market continues to reflect an economy growing at a steady, solid pace, the Fed will have few obstacles in its path to raise rates again later this month.

(2) Watch Mainland China for tariff-related troubles

Chinese stocks are already the worst performers among the world’s biggest indices. Next week could see them go from cheap to even cheaper as the Trump administration prepares to impose tariffs on another $200 billion of Chinese imports, on top of the $50 bln already taxed in the trade row.

Those concerns over trade, tightening monetary conditions at home, slowing growth and rising defaults have managed to wipe out 13 percent of the Shanghai index’s market value since late March, and drag the index down 17 percent.

More Chinese stocks enter the MSCI benchmark emerging market index on Monday, although China’s overall weighting is still a trifling 0.8 percent.

And foreigners, who own just around 5 percent of that market, are still rushing in for a slice of the long-term Chinese growth pie. Valuations are low but domestic investors are not ready to buy yet. That is why share trading volumes have collapsed and there’s been a rush of money into China’s money market mutual funds.

(3) Emerging market (EM) currency woes should continue

Emerging markets don’t have to go looking for trouble, given the crises now enveloping Turkey and Argentina. Trump’s latest comments that the United States is ready to impose tariffs on $200 billion more in Chinese imports have put further pressure on EM currencies.

Investors bet that any escalation of trade tensions would boost the greenback and hurt export-oriented emerging markets. And the damage could be indiscriminate.

Those tensions looked to be abating this week after the Chinese central bank propped up the yuan against the dollar, and the United States and Canada remain locked into discussions to hammer out a trade deal. But Trump’s latest comments on China put the spotlight back on emerging markets.

The Turkish lira has been firmly in the spotlight, dropping more than 30 percent in August. But Argentina’s peso plunged around 20 pct this week — more than 10% in one day — dragging other currencies like the Brazilian real down with it. With the Fed poised to raise rates later this month, the blood-letting may not be over for EM currencies.

(4) Good ol’ Brexit

Markets got a rare taste of how an orderly Brexit might feel this week when EU negotiator Michel Barnier said the bloc was ready to offer Britain an unprecedentedly close relationship after it leaves. At least that’s how markets interpreted it.

The result was a rapid unwinding of short sterling positions by investors who had hedged against a no-deal Brexit and a sharp jump in the currency. It moved back above $1.30 for the first time in three weeks.

Still, many of those short bets remain, meaning even a slight shift in sentiment toward sterling, can lead to outsized moves.

That could happen as early as next week when parliament returns from summer recess and raises the prospect of more divisive noise over Brexit. A slew of data on Britain’s services and manufacturing sectors will also be closely watched.

Also coming up on the horizon is the Conservative Party conference at the end of September, where Prime Minister Theresa May could potentially face a leadership challenge.

(5) Finally, there is Italy to worry about, still

Concerns over Italy’s upcoming budget have ebbed and flowed almost on a daily basis, with the country’s borrowing costs rising and falling sharply with every politician’s comment on the 2019 spending plans.

The main point of contention — whether Italy will breach the 3% deficit threshold — has gripped investors and this week its bond yield spread over Germany hit its widest in three months.

The question for next week is whether or not these concerns are seeping into business sentiment and, by extension, economic activity.

Markit’s manufacturing sector purchasing managers’ index survey for August is due on Monday, and the services sector PMI is due out on Wednesday. A consensus of economists polled by Reuters expect 51.1 for manufacturing and 53.0 for services.

If Italy’s economy, which showed shoots of recovery in 2017, goes back to the stasis of previous years, the government will be under renewed pressure. With Fitch due to review Italy’s credit rating late on Friday, investors will once again have plenty to chew on.

Top Zacks #1 Rank Stocks—

(1) Softbank (SFTBY Quick QuoteSFTBY - Free Report) : I haven’t seen this wireless non-U.S. stock on our top list before. It is priced at $46 a share. That gives it a $99.7B market cap. The long-term Zacks Value score at B is attractive, too.

(2) Glencore PLC (GLNCY Quick QuoteGLNCY - Free Report) : This is a huge multi-national mining conglomerate. It is very, very interesting to see it on our top list, given the hand wringing going on with Emerging Markets. Shares trade at a paltry $8 a piece, giving it a solid long-term Zacks Value score of A.

(3) DR Horton (DHI Quick QuoteDHI - Free Report) : Another surprise! A U.S. homebuilder is on our top list. The Zacks Value score of C comes with a Zacks Growth score of A. At just above $44 a share, maybe this is another solid contrarian stock to look into?

Key Global Macro—

On Tuesday, the U.S ISM for manufacturing comes out. This is a key U.S. data report. The consensus is looking for 58.0, in line with the prior 58.1 reading. 60 is the level for +3.0 GDP growth.

On Wednesday, Australia’s latest quarterly GDP report gets released. Look for +3.1% y/y there. The seasonally adjusted q/q reading will be lower, at +1.0%.

Russia’s services PMI comes out. It has been 52.8.

India’s services PMI comes out. It has been at 54.2.

Ireland’s services PMI also comes out. It has been 57.4.

Sweden’s services PMI comes out. It has been the highest at 59.1.

On Thursday, the ADP payroll data should be +175K. This is down from +219K last month.

The ISM non-manufacturing index also comes out for the USA. It was 55.7 last month. It looks to be 57.0 this month. Those are solid readings, but not +3.0% GDP growth readings.

On Friday, Eurozone GDP growth comes out. It has been +2.2% y/y. The q/q reading could look anemic at +0.4% this time around.

U.S. nonfarm payroll data hits. Look for +180K. The household unemployment rate should be 3.9% in August, the same as in July. Annual wage growth data will be the key data release here.