Summary:
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ADP signals lower-than-expected employment increase
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Initial jobless claims rise moderately against last week’s data
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EURUSD tries to break above the 23.6% Fibo level of the last major decline
While yesterday’s trading has been subdued due to the holiday in the United States today is a different day. US traders are returning after a day off and will be offered a vast array of data from the US economy today. The ADP labour market report launched the data marathon followed by weekly initial jobless claims reading.
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ADP figures showed a smaller-than-expected increase in the employment. Tomorrow’s NFP report may be poised to disappoint. Source: Macrobond, XTB Research
The ADP labour market reading is usually attracting some attention because it is released one day ahead of the official government report. The ADP figures for June turned out to be disappointment. Namely, markets expected a 190k increase in employment while the actual reading showed just 177k. However, the previous month’s data was revised higher from 178k to 189k. This does not bode well for tomorrow’s NFP report that should show 195k increase in employment. However, when it comes to NFP the focus will be mainly on wages. We encourage you to take a look at our analysis of this event that is available here.
This week’s initial jobless claims reading outpaced the 4-week average. Source: Macrobond, XTB Research
Shortly after ADP figures were released weekly jobless claims data was published. The headline figure saw 231k increase against expectations of 225k. It is worth to note that prior reading of 227k was revised subtly higher to 228k. When it comes to the continuing claims data we also observed a higher-than-expected reading at 1739k while consensus pointed for 1718k. Also in this case we saw a subtle upward revision of the prior reading from 1705k to 1707k.
EURUSD inched higher following the ADP reading and moved lower once jobless claims figures were published causing the outcome of those two events to be neutral for the pair. Taking a look at the main currency pair from the broader perspective we can see that after rebounding of the support zone ranging 1.1505-1.1590 the pair struggled to overcome the 23.6% Fibo level of the last major slump. Do notice how the pair respects subsequent retracement levels therefore those handles may be used by traders to join potential trend. Source: xStation5
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