Bank of America Global Research previews the US August jobs report due on Friday.

"Aug payrolls: We expect Aug payrolls to rise 40k (private: 35k), below consensus but consistent with another seasonally soft summer report. The unemployment rate should remain 4.1%, though a rebound in participation could push it to 4.2%," BofA notes.

Fed: A significantly weaker report could lower hike odds, but CPI remains the key release for determining whether the Fed follows through. We hold our call for Sept hike.

"Rates & FX: We see asymmetric risk: a stronger report is unlikely to materially increase September hike odds, but a weaker report could meaningfully reduce them by shifting focus back to the labor side of the mandate. We are long 5y, in 5y30y steepener (see Appendix) and tactically short USD (vs. NZD)," BofA adds.