Yesterday's data was a mixed bag, with a significant miss on the ADP payroll figures, contrasted by ISM services and jobless claims marginally outperforming expectations.
Initial market reaction was once again a weaker USD. However, similar to the price action we saw after JOLTS numbers, losses did not follow through.
Moves on GBP pairs were very minimal.
*Daily move - against G10 rates at 7:30am, 06.09.24
** Indicative rates - interbank rates at 7:30am, 06.09.24
Today’s job and payroll numbers are expected to be a decisive factor in market direction. It seems we are now in an environment where good news is good and bad news is bad; and where markets are assessing whether the economy is slowing too much or not. If that's the case, last month's price action may reoccur, causing markets to go into a risk-averse mode, favouring safe havens such as JPY and CHF.
Initially, USD would likely weaken as markets raise the odds of a 0.50% rate cut later this month. However, it would be interesting to see if later the markets see the currency as a safe haven and we see it gain. All eyes will be on the numbers at 1.30pm today.
USD is starting the day weaker after Fed’s Goolsbee remarked that US unemployment is rising faster than anticipated in June, making rate cuts justified.
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