With this week’s jobless claims and nonfarm payrolls reports on hold indefinitely due to the US government shutdown, today’s ADP payrolls report stood in as a key indicator of current US employment trends. Like last month’s nonfarm report, not only did jobs come in below expectations, but the previous month’s number was revised downward. This news, combined with dovish comments from Boston Fed President Rosengren who suggested removal of accommodation could take years, squashed speculation of an October start to tapering and expectations of a quick withdrawal of stimulus. This ripped the rug out from under the greenback and sent the US Dollar Index breaking down through 80.00. The freefall of USD sparked a rebound in commodities propelling gold back above $1,300 and enabling crude oil and gasoline to post 1.3%-2.0% gains despite disappointing inventories. Commodities struggled to hold on to these gains into the afternoon and with key resistance levels like $110.00 for Brent, $105.00 for WTI, $1,340 for gold and $22.00 for silver holding, this rally, like so many others lately, may be short-lived. In currency markets, we saw continued inflows into defensives like JPY and CHF but perhaps the biggest story of the day was a rally in EUR. The single currency got a boost from a successful resolution (for now) of Italy’s political crisis with PM Letta surviving a confidence vote after former PM Berlusconi caved. The ECB holding the course at today’s meeting also provided some support. The MIB rallied in early trading as traders anticipated a successful resolution but then dropped back after the vote on profit-taking against the news. AUD and NZD went in different directions again today, reversing some of their divergence from earlier in the week as NZD outperformed this time. Today brings service PMI reports from around the world which could keep trading active. The Australian report could attract attention with traders looking for confirmation of the big improvement on the manufacturing side. Another disappointment from the UK, however, would make it 3 for 3 suggesting that expectations for the UK economy may have gone too far too quickly. Economic News Highlights of overnight announcements include: US ADP Payrolls street 180K vs previous revised down to 159K from 176K US crude oil inventories 5.5 mmbbls vs street 2.3 mmbbls US gasoline inventories 3.5 mmbbls vs street (0.6mmbbls) Spain unemployment change 25K vs street 35K UK construction PMI 58.9 vs street 59.5 ECB interest rate decision street 0.50% no change expected Upcoming significant announcements include: 10:00 am BST Eurozone retail sales street (1.3%) 7:30 am EDT US Challenger layoffs previous 50K 10:30 am EDT US natural gas storage street 96 BCF vs previous 87 BCF Note US jobless claims and factory orders likely postponed due to US government shutdown Service/Non-manufacturing PMI include: 11:00 am AEST China previous 53.9 8:15 am BST Spain street 51.0 8:45 am BST Italy previous 48.8 8:50 am BST France street 50.7 vs previous 48.9 8:55 am BST Germany previous 52.8 9:30 am BST UK previous 60.5 10:00 am EDT US street 57.0 vs previous 58.6


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