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4 Mar 2015
US ADP employment sees a small downside risk – BMTU
FXStreet (Barcelona) - Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, previews today’s US ADP employment release, and further shares the implications of a soft number on USD.
Key Quotes
“It is worth noting that some of our BTMU Short-term Valuation Models have started to diverge with spot with our models starting to show dollar weakness. Both our EUR/USD and AUD/USD models are notably higher than spot (1.1500 & 0.8000 respectively) and hence any disappointing news on the US side might result in a sharper bounce higher.”
“The ADP employment report today will be important as a proxy for Friday and given the harsh weather on the East Coast of the US and the port strikes on the West Coast, there is a small downside risk to the data this week.”
“The Beige Book will also be released for the meeting on 18th March. This will definitely garner greater attention than usual given this meeting is potentially crucial with a risk of the formal guidance from the Fed changing.”
“We still believe the semi-annual testimony by Chair Yellen laid the groundwork for a change in communication and the jobs data this week and the Beige Book tonight will be key factors determining whether the Fed makes the move this month.”
Key Quotes
“It is worth noting that some of our BTMU Short-term Valuation Models have started to diverge with spot with our models starting to show dollar weakness. Both our EUR/USD and AUD/USD models are notably higher than spot (1.1500 & 0.8000 respectively) and hence any disappointing news on the US side might result in a sharper bounce higher.”
“The ADP employment report today will be important as a proxy for Friday and given the harsh weather on the East Coast of the US and the port strikes on the West Coast, there is a small downside risk to the data this week.”
“The Beige Book will also be released for the meeting on 18th March. This will definitely garner greater attention than usual given this meeting is potentially crucial with a risk of the formal guidance from the Fed changing.”
“We still believe the semi-annual testimony by Chair Yellen laid the groundwork for a change in communication and the jobs data this week and the Beige Book tonight will be key factors determining whether the Fed makes the move this month.”