Aside from what it does or does not mean for the US economy, the ADP gave us another clue on price action
The fact that the EURUSD and GBPUSD had a greater reaction than USDJPY over the data highlights the CB policy divergence. Perhaps that's been a big part of early year trading that's been masked by everything else going on. As Adam points out below, things are still a little messy
It is a theme that will become entrenched in trading this year. When central banks had more normal rates markets just used to run between rate moves like running from one side of a boat to the other. The gap between them is very wide at the moment and until that closes and everyone is running in the same direction, the differences in monetary policy are going to be where a big chunk of volatility is going to come from
Today was only a little clue but if they start adding up we'll get a good feel for how the market wants to play.
Being prepared can mean we don't get caught out
