Forex Top Team

This Week’s Sensitivity to US Employment-Related Indicators, Starting with ADP Employment Report

This week, the market’s attention is focused on the US employment statistics, with various labor market-related economic data being released ahead of Friday’s employment report. Yesterday, the USD/JPY exhibited a solid push into the 147 yen range during the London session, indicating a growing sentiment of upward momentum. However, the market reacted sharply to the downside when the US JOLTS job openings data came in weaker than expected. The USD swiftly depreciated, and USD/JPY plunged into the 145 yen range. While some recovery took place afterward, the pair remains capped around the mid-146 yen level.

In the upcoming foreign markets, various US economic indicators will be released, including the MBA Mortgage Applications (Aug 19 – Aug 25), ADP Employment Change (August), US Real GDP (Q2) Revised, US Wholesale Inventories (July), and US Existing Home Sales (July). The ADP Employment Change is anticipated to show an increase of around 195,000 jobs, slightly lower than the previous figure of 324,000. Given the significant market reaction to the downside surprise in job openings data yesterday, there is likely to be a sense of tension around today’s ADP report.

In addition, Germany will release the preliminary Consumer Price Index (CPI) for August. It’s a common practice for individual state figures to be released before the national version. The figure from North Rhine-Westphalia state, released a while ago, showed a slight upside surprise, with a year-on-year increase of +5.9%, compared to the previous +5.8%. The Euro responded with a modest buying reaction to this surprise. However, this has provided some preparation for a potential upside surprise in the national CPI figure for Germany. Other Eurozone-related economic indicators set to be released include Spanish CPI (August), Eurozone Consumer Confidence (final, August), and Eurozone Economic Sentiment (August).

 

While ADP Employment Change tends to show discrepancies with the weekend’s employment report, it’s advisable to pay more attention to subsequent indicators like the revised US Real GDP and the US Existing Home Sales figure for potential market impact.