Investors are bracing for significant economic indicators today, as the ADP employment change data is set to be released at 14:15 CET. This report, which provides insights into US employment trends, will arrive alongside the ISM services PMI, scheduled for release at 16:00 CET. These two reports, central to gauging the health of the US economy, will be highly watched by traders.
The ADP data is poised to show much better than expected private employment growth. This data, once provided, will shed much-needed light on changes to private sector jobs. Many analysts are expecting the numbers to point to resiliency in the labor market, which would certainly complicate discussions about shifting monetary policy. Meanwhile, the ISM services PMI will offer additional context by assessing the health of the services sector, further impacting economic forecasts.
Economic Indicators and Market Impact
This week’s lack of regularly scheduled US Non-Farm Payroll (NFP) data may be bullish for the US Dollar. Usually published on the first Friday of every month, the NFP data has a huge impact on investor sentiment and market action. With other data out this week notably lacking, today’s ADP report is of even greater importance. It would provide investors much needed visibility into the acute current state of employment.
Ever since the ink went dry on the jobs agreement, market analysts have suggested that the kickoff ADP figures would exceed expectations. This expected positive news on jobs would help build confidence in the recovery and energize the markets. Discretionary investors should take serious notice of the breaking 50-moving average during releases of significant news. This average is a good early warning of big price changes, in either direction.
Key Levels to Watch
Once the ADP data is released, the actual levels may serve as key magnets or points of interest for traders. With the market quick to overreact to negative economic news, knowing important levels can provide investors targeting this volatility with additional catalysts to layer into their trades. Landmark, meanwhile, advises watching bond price action immediately after the announcement to look for direction.
The ISM services PMI will come out just after the ADP report. All of this data will be very important to determining the overall sentiment in the markets. The simultaneous release of employment and services data is a perfect opportunity to see the economic landscape in stark contrast. Therefore, traders should have to rethink their trading strategy accordingly.