EURUSD gains ahead of ADP 📌

Will the May report show a rebound in private-sector employment? 🔎📄

• The ADP private sector employment report for May 2025 is expected to show an increase of 110,000 jobs, up from a 62,000 gain in April;

• Currently, Federal Reserve officials do not see alarming signs of labor market weakness.

• The April report brought only 62,000 new jobs, raising questions about the labor market's condition. The May 2025 data will be key in assessing whether that was a one-off dip or the beginning of a longer trend.

The May ADP report will be released today at 01:15 PM BST (08:15 ET). The market consensus expects an increase of 110,000 private sector jobs – a modest rebound after the weak April reading of just 62,000. The data comes in a tense environment: President Trump’s decision to double tariffs on steel and aluminum takes effect today, and investors are waiting to see whether the announced conversation with Chinese President Xi will ease trade tensions. Investors are also awaiting the outcome of negotiations with other trade partners. The White House confirmed yesterday that today is the deadline for submitting trade offers from other countries.

The dollar index is holding just below 99.10 and is posting losses today after yesterday’s rebound. USDJPY is hovering around 144.10, but market sentiment is mixed following conflicting signals from the U.S. economy. Monday’s data on declining manufacturing activity was offset by Tuesday’s unexpected rise in job openings for April to 7.39 million. Today’s ADP release and Friday’s NFP may give investors more clarity in either direction.

Last month, the ADP report turned out to be much weaker than expected, while the later NFP report surprised in the opposite direction. As a result, we saw a significant divergence between the releases.

What to watch for

• Stronger-than-expected reading: The Fed would be reassured that the labor market is stable, and the current moderately restrictive monetary policy is appropriate. The dollar could gain in value. The equity market reaction is harder to predict, but a strong report would reduce the risk of a slowdown, possibly triggering a positive response in indices.

• Weaker reading: This would be the second weak print in a row and would support the view that tariffs are beginning to restrict hiring. We could see a market reaction opposite to the one above. While Friday’s NFP is more important for the Fed, a weak print today would still revive speculation about a possible Fed move as early as July.

EURUSD

The dollar is weak today, and the EURUSD is up 0.06% to 1.13800. In addition to the ADP report, attention is also drawn to today’s ISM services data and potential updates on trade deals with U.S. partners.

Source: xStation 5