US equities and the US dollar will be on watch today. Not only do we have an ADP employment report release scheduled for 1:15 pm GMT, which will be a final hint ahead of Friday's NFP data, but traders will also get to hear from Fed Chair Powell at 6:30 pm GMT.
ADP report is expected to show a 200k jobs gain for November, a lower jobs addition than in October when ADP showed +239k and NFP showed +261k. The Fed is closely watching labor market developments as jobs market strength is one of the main reasons that gives Fed comfort to continue to tighten with focus on inflation. Softness in labor market, albeit expected and forecasted by the Fed in next year, could give the Fed reasons to put a brake on the tightening process.
However, it should be said that ADP's track record of predicting NFP readings is quite poor and the report itself rarely triggers major market moves unless a big deviation from expectations is reported. On the other hand, volatility is almost certain in the evening when Powell takes the stage. Fed Chair will deliver a speech at Brookings Institution in Washington and the topic of the speech is "Economic Outlook, Inflation and the Labour Market", meaning that it is highly unlikely to be a nothing burger.
Nasdaq-100 (US100) tends to be a major US index that sees the biggest reactions to monetary policy developments so it may see some wild moves in the evening. The index has recently made another failed attempt at breaking above a mid-term downward trendline and has pulled back below the 11,625 pts support zone yesterday. However, an attempt at breaking back above this zone can be spotted today.
Source: xStation5
