ADP Non-Farm Payrolls on Tap for Today
January 5th, 2011 Posted in Analyst Picks
Dan Eduard
Name: Dan
Traders eager for markets to return to their pre-holiday volatility levels should pay particular attention to today’s US ADP Non-Farm Payrolls figure, set to be released at 13:15 GMT. Economic indicators out of the US have been relatively strong over the last few weeks, and have led to an increase in investor confidence in the global economic recovery. As such riskier currencies, like the euro and UK pound have made fairly significant gains against the safe-haven USD and JPY.
The ADP figure precedes US government employment data by two days, and as such, is considered a solid predictor of the official statistic. Analysts are predicting today’s indicator to come in at around 101K, which, if true, would signal the third consecutive month that employment rose in the US. While the number is not significant enough to state that the US employment sector is fully over the economic crisis, it is a clear indication that it is going in the right direction.
The euro is likely to maintain its recent bullish trend should the employment figure come in at or above its predicted level. Currently the EUR/USD is trading just belowthe 1.3300 level. A solid ADP figure could send the pair well above yesterday’s high of 1.3430, and it may even approach the 1.3500 resistance line.
Turning to the rest of the week, traders will obviously want to pay attention to Friday’s Non-Farm Payrolls for the official US government employment figure. In addition, the latest US Unemployment Rate will be announced. Early forecasts are saying that the unemployment rate will likely drop from 9.8% to 9.7%. If true, the markets are likely to see heavy fluctuations as a result.
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