• ADP employment change 235k vs 199k exp
  • Prior revised higher by 10k to 244k 
  • USD moving higher post release

Given the fallout from last month’s NFP report, this Friday’s release will no doubt be highly anticipated (preview here). Today we’ve had some data to whet the appetite, with the ADP  coming in better than expected and raising the bar for the NFP release. The employment change showed 235k jobs being added in February, above the 199k expected and market the 3rd consecutive beat for this print.

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 The ADP and NFP readings have exhibited a strong positive correlation previously and today’s release could bode well for Friday. Source: XTB Macrobond

What is more, the prior reading – which was already a strong 234k – was revised higher to 244k to provide further good news for the US labour market. Looking at the revisions seen in the past year, the latest positive one was only the 4th such occurrence, and the first since last August’s release. Three of the past five have in fact been revised lower, so the positive revision is even better in light of this. 

 Given that the ADP is seen by many as simply a pre-cursor to the NFP, the moves associated with the release are typically far smaller and less volatile. There has been a little pick-up in the USD in the last half an hour but no strong clean moves. The markets are likely still more focused on the news of Cohn’s resignation and what this could mean for the US economic policy going forward. 

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 The USD is edging higher today but the market is still biding its time and awaiting the fallout of Cohn’s resignation. Source: xStation

 In terms of individual pairs the USDJPY is at an interesting level after trying to find some support. The pair has been in a steady decline for much of the past 5 months but has recently seen buyers defending the 105.25 level. If price can hold above here going forward – especially considering Cohn’s resignation which is seen by some as uSD negative – then a recovery may lie ahead. Fib retracmeents of the fall from 114.73 could give potential levels to watch with the 23.6% at 107.49.

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 The USDJPY is searching for support and fib retracements could give levels to keep an eye on if we get a bounce here. Source: xStation