Morgan Stanley Research previews the US September jobs report due on Friday.

"We estimate September payrolls +65k and private payrolls +75k. The unemployment rate moves sideways at 4.1%, on the verge of a 4.2%, as LFPR inches up. Average hourly earnings remain slow, rising 0.2% m/m and 3.1% y/y," MS notes.

"Our forecast reflects continued strong labor demand, with only limited reversal of the industry payrolls that were above trend in August. Despite resilience in payrolls, the unemployment rate moves sideways (or up) as labor force participation moves sideways (or up).

The Fed's clearly not concerned about faltering labor demand. But a drop in the unemployment rate below 4.0% would further raise the chance of an October rate hike," MS adds.