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ADP Non-Farm Payrolls provided some good news: the private sector gained 114K jobs in July, better than 100K that was expected. This triggers some risk appetite, with the dollar gaining against the yen and dropping against the euro. These moves are limited, and they reflect the doubt the market has in these ADP numbers.

USD/JPY and USD/CHF are slightly higher after the publication. The franc and the yen retreat on good US figures. The rise of the euro and the pound, shows that the risk factor is in play: good US figures increase the appetite for risk – and these currencies are “risky”.  This behavior shows that risk is still a big factor, and that the markets await bad news: from the Non-Farm Payrolls and from other indicators and news from the European debt crisis front.

It is very important to note that last month’s excellent report by ADP wasn’t reflected in the official Non-Farm Payrolls, to say the least. ADP provided a great surprise for the private sector in June (157K reported then, revised to 145K now) and NFP was very weak with only 18,000 altogether, including a very weak gain in the private sector.

The markets are awaiting another important release quite soon. At 14:00 GMT, the ISM Non-Manufacturing PMI will be released. The manufacturing sector already disappointed with a horrible outcome – only 50.9 points, which reflect a halt in this sector.

As the services sector is by far the largest in the US economy, this publication will rock the markets. This is an even more important hint towards the NFP.

Here is how to trade EUR/USD with this event.