Markets were quiet in the European session ahead of the upcoming US non-farm payrolls (NFP) report, with little in the way of notable news or data releases. Price action remained mostly rangebound: equities edged slightly higher and oil slipped modestly, but both moves were negligible. The consolidation is typical of sessions preceding top-tier US data, as traders often reduce positioning rather than take on new risk before a release that can reset rate expectations.

The main data point of the session was the Eurozone retail sales report, which showed a decline in July, pointing to softer consumer demand. Consumer spending is a key pillar of Eurozone growth, so the figure adds to the picture of a sluggish recovery in the currency bloc. The volume of retail trade fell by 0.6% month-on-month in July, reversing the 0.2% increase recorded in June. On an annual basis, however, retail activity remained slightly positive: compared with July 2025, Eurozone retail sales increased 0.6%, while sales across the EU as a whole rose 1.0%.

The monthly decline was driven primarily by weaker demand for non-food products, where sales dropped 1.4% in the Eurozone. Sales of automotive fuel also fell 0.8%, while spending on food, drinks and tobacco provided some support, rising 0.4%. The weakness in discretionary, non-food categories is often watched as a gauge of household confidence, since consumers tend to cut optional purchases first when budgets are tight.

Looking ahead to the American session, both Canada's jobs report and the US NFP are due. Canada's employment change for August is expected at 15K, down from 75K previously, with the unemployment rate seen steady at 6.4%. The data is unlikely to influence the Bank of Canada's policy outlook, as the focus there remains on inflation. That said, a very strong report could give the CAD a boost following the Bank of Canada's more hawkish than expected rate decision.

The US NFP is expected at 56K versus -23K previously, with the unemployment rate forecast to remain unchanged at 4.1%. Average hourly earnings are expected at 3.0% year-on-year, down from 3.2% previously, while the month-on-month measure is seen at 0.3% versus 0.1% prior.

The upcoming CPI release is viewed as more consequential, as it will determine whether the Fed hikes rates in September or stays on hold for at least another month. As a result, the market reaction to the jobs data will likely be limited if the figures come in line with expectations, or slightly above or below them, since such an outcome would not change the Fed's calculus. It would likely take a very strong or very weak print to move markets meaningfully — a dynamic worth watching beyond the headline number, since the wage-growth component and any revisions to prior months can also shift the rate debate.

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