Market Overview

Surprisingly strong ADP Employment data support USD

According to published ADP data, US employment growth in January amounted to 291K, almost double the average market forecast by 157K. ADP publications are the closest in form to the Friday official NFP report. Since September, there has been a monthly increase in employment growth. Historically, this is a robust growth rate.

We have yet to receive confirmation of this trend in the form of an official report on Friday. But it’s still hard to resist the flow of good data that we see this week. Together with measures to support the Chinese market and reduce anxiety due to the coronavirus, they helped bring the S&P500 back to its all-time highs, while the Nasdaq has been updating his since yesterday.

Healthy labour market statistics is another good news for the USD. After a recent Fed meeting, the chances of new rate cuts this year rose almost daily, according to CME’s FedWatch tool. A series of robust data may trigger a reassessment of monetary policy prospects.

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