Stronger ADP employment report may fail to boost to Dollar much

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 of a time when dust of volatility has somewhat settled and economic dockets remained relatively strong.

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 214,000 in January. In January payroll grew by 193,000.
• Small business sector hiring at 76,000.
• Employment in franchise increased by 18,500.
• 9000 jobs were lost in manufacturing sector.
• 5,000 jobs were added in goods producing sector.
• Construction sector added 27,000 on payroll.
• 8,000 jobs were added in financial activities.
• Services sector is main job provider. Payroll added 208,000 people in February.

Expectation Today 

• Headline number is expected to drop to 194,000 as per median estimate.

Market Impact 

• Any gain above 200,000 will be considered to be very good and Dollar might gain some support, however impact of stronger report unlikely to be much, especially after dovish commentaries from Janet Yellen last night.
• Data below 150,000 likely to give rise to concerns regarding US economic prowess and might lead to risk aversion as well as slide in Dollar.
• Odds of rate hike may also improve.

Dollar index is currently trading at 95, down -0.2% so far today.