- ADP falls short of an estimation in May
- US trade balance meets expectations
- USD remains muffled following the data
There is not time to take a breath today as a slew of macroeconomic releases floods us. After the ECB minutes which have been treated quite bullish looking at the EURUSD chart, another event could be USD-negative.
The ADP reported that the US economy added just 158k new jobs compared with an estimation which had looked for 185k. Otherwise, a reading for April was revised down from 253k to 230k (let us recall that in the prior month the ADP report substantially missed a figure released by NFP). Although, a change in employment is not so important at this stage as the US economy is already at or close to full employment, it usually draws some focus.
According to ADP there could be another feeble print in NFP tomorrow. Source: Bloomberg, XTB Research
Having assumed that the ADP is right, there could be second quite a poor reading tomorrow as ADP suggests ca. 150k which could be reported by the NFP on Friday. That said, there is no doubt that the most relevant issue nowadays is a change in wages. If they proved to be higher than expected tomorrow, it could bode well for inflation and the USD as well.
US trade balance turned out to be almost in line with expectations. Source: Bloomberg, XTB Research
Besides, there was trade data from the US which more or less met market anticipations. In a yearly basis there was a small uptick, as a result deficit narrowed in May to $46.5bn. Taking a closer look at the chart above we could see that import was slightly lower than previously, to be precise it declined 0.1% mom while export picked up 0.4% mom.
The GPBUSD is coming off a crucial resistance and could go towards the latest lows located in the vicinity of a 23.6% retracement. Source: xStation5
Technically, the GBPUSD could be prone to continue sliding towards the nearest support zone placed in the vicinity of a 23.6% retracement after a rebound from 1.2980. Furthermore, decreases could be underpinned by the interest rate market as well. Taking a look at FRA 9×12 contracts one could suppose that the pair could be a bit above 1.28.
FRA 9×12 rates for GBP and USD suggest that the pair could be a bit above 1.28. Source: Bloomberg