The ADP employment report is up in about 20 minutes. ADP is a payroll processing company which handles something like 20% of the paychecks in America. They have a pretty unique insight into the present state of the labor market.
Economists expect ADP to report that about 190,000 jobs were lost in October. A considerably stronger report will initially be seen as a boon for the risk trade, as it would solidify the case for a global recovery. On deeper reflection, as the Fed meets today, the market likely will fear a faster-than-expected Fed rate hike down the road.
Bottom line: We should see a knee-jerk rally on improved ADP data, but the dollar could ultimately benefit from the perception that super low rates may end in the first half of 2010, rather than the second half as the market now expects.
