ADP employment report preview:

ADP employment data to be released at 13:15 GMT is today’s most vital dockets from US to be watched by market participants. This report is one of the key data that investors will use to gauge US economic strength.

What is ADP employment?

• The report is a measure of non-farm private sector employment which is obtained by utilizing an anonymous subset of roughly 400,000 U.S. businesses which are clients of ADP.

• This data is a very good measure of employment strength of the economy and a good precursor of Nonfarm payroll data.

Previous performance –

• Non-farm private sector employment grew at 147,000 in October. In September payroll grew by 202,000.
• Small business sector hiring at 34,000.
• Employment in franchise increased by 24,500.
• 1,000 jobs lost in manufacturing sector.
• 18,000 jobs were lost in goods producing sector.
• Construction sector lost 15,000 jobs.
• 18,000 jobs were added in financial activities.
• Services sector remains job provider. Payroll added 165,000 people in October.

Expectation Today –

• Headline number is expected to rise to 160,000 as per median estimate.

Market Impact –

• Any gain above 200,000 will be considered to be very good and rate hike bets are likely to rise once more, providing support to the already rising dollar.

• Data below 150,000 likely to give rise to concerns regarding US economic prowess and investors would have to consider their rate hike outlook, and there could be a run towards safety.

However, there may not be much volatility surrounding the report, as the focus is on OPEC meeting today. The dollar index is currently trading at 101, flat for the day.