Even if the ADP employment number may not have any accuracy in identifying with the jobs report on Friday, it is still one that markets look to for some form of gauge. ¯\_(ツ)_/¯
That was the case yesterday as the dollar was sent lower alongside Treasury yields before recovering some slight ground later in the day. Here is the report in case you missed it: ADP US August employment +177K vs +195K expected
The dollar is sitting steadier today but overall, it's no doubt that it has been knocked off its perch and the more that US data showcases further softening in economic conditions, that will drag the dollar down further during the week.
We'll have the weekly jobless claims and PCE price index today before the attention turns towards the non-farm payrolls tomorrow. Those are the key risk events to watch for the bond market and the dollar currently.
Looking to European trading today, the euro will be a focus point as traders are still sorting their feet on ECB pricing. The odds of a 25 bps rate hike for next month are at ~58% currently and that might move a bit as we will be getting Eurozone consumer price inflation for August later in the day.
The expectation is for the headline reading to fall to 5.1% from 5.3% previously and for the core reading to drop to 5.3% from 5.5% previously. So, anything higher than estimates will likely trigger markets to lean more towards a rate hike but we'll see what the ECB has to say with regards to that.
0600 GMT - Germany July retail sales
0645 GMT - France Q2 final GDP figures
0645 GMT - France August preliminary CPI figures
0755 GMT - Germany August unemployment change, rate
0900 GMT - Eurozone July unemployment rate
0900 GMT - Eurozone August preliminary CPI figures
1130 GMT - US August Challenger job cuts, layoffs
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
