In the lead up to tomorrow’s all important NFP number, last night saw the ADP Non-Farm Employment Change come in below expectation at 190K v the 204K expected. The July revision was also to the downside from 185k to now 177k.
CEO of ADP, Carlos Rodriguez:
“The job growth numbers for August improved slightly from July.”
“The employment gains for the month are in line with the year to date average.”
We’re now down to a 30% chance that the Fed makes their first move in September (this month now!). With last night’s ADP number as well as second tier Factory Orders missing the mark, it would be easier for the Fed to justify waiting if NFP does miss tomorrow. I get the feeling that the run of good numbers we’ve seen running into the month could be easily put on the back-burner if the most recent disappoints.
Last night also saw ‘bond guru’ Bill Gross labeling any move that the Fed now makes within the current market turmoil as “too little too late”.
From an investment outlook Wednesday for Denver-based Janus Capital Group:
“The ‘too late’ refers to the fact that they may have missed their window of opportunity in early 2015, and the ‘too little’ speaks to my concept of a new neutral policy rate which should be closer to 2% nominal, but now cannot be approached without spooking markets.”
Listening to someone like Bill Gross is questionable, but the headlines love him so we have to take notice.
Australian GDP also came in at 0.2% v the 0.4% expected in a miss that was expected after the Trade Balance data we saw on Tuesday.
The Aussie dollar briefly poked its head through the psychologically important 70c level on the poor GDP number, but the break wasn’t sustained.
Just remember that the AUD/USD weekly support level that we have been watching hasn’t been cleanly broken and now we’ve tested 0.7000, we could easily ping straight back up from here.
On the Calendar Thursday:
CNY Bank Holiday
AUD Retail Sales m/m
AUD Trade Balance
GBP Services PMI
EUR Minimum Bid Rate
EUR ECB Press Conference
CAD Trade Balance
USD Trade Balance
USD Unemployment Claims
USD ISM Non-Manufacturing PMI
Chart of the Day:
Well China picked a good day to go on holiday. Boy is that one ugly looking chart!
After the solid Hang Seng bullish channel dating back to 2008, the party looks to have finally come to an end, with an ugly breakout and close below support.
Dane Williams – @VantageFX
Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Vantage FX Pty Ltd, does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. The research contained in this report should not be construed as a solicitation to trade. All opinions, news, research, analyses, prices or other information is provided as general market commentary and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness and Vantage FX shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on the service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.