The private sector report by ADP has shown a big gain in jobs: 157K. This is far better than 67K that was expected. The dollar gains across the board, especially against the “safe haven” currencies: the yen and the franc.
Last month, the ADP report was perfect for forecasting the weak NFP. It printed a gain of only 38K jobs instead of 177K that was expected. The official figure for both the private and public sector wasn’t too far: only 54K, very disappointing as well.
Such a correlation between ADP and NFP isn’t always the case.
The reaction in EUR/USD is very limited, as the markets are awaiting the press conference by Jean-Claude Trichet. The ECB decided to raise the rates to 1.50%, as expected.
Together with the strong employment component of the US Non-Manufacturing PMI (which stood out in a generally poor report) and a strong manufacturing PMI, we can expect a good result in the Non-Farm Payrolls.
Stay tuned for a preview of the NFP, later on.
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