ADP payrolls for March at 189K came in well below street expectations and below the 200-250K sweet spot. As softening employment could provide a reason for the Fed to push off interest rate liftoff from June to later in the year, the biggest impact so far has been on USD which has tumbled again, giving up some of its recent rebound gains.
The falling USD has enabled commodity markets to rebound a bit and regain some of yesterday’s losses, particularly in oil and gasoline. Gold and all the majors except for GBP and NZD have also been able to take advantage of the weaker greenback with CHF, EUR and CAD leading the way.
Manufacturing PMI reports from around the world has also been moving markets today. Australia and China both either beat the street or showed improvement, giving Asia Pacific Indices a lift overnight. The one exception was Japan where the Nikkei fell after PMI came in below expectations. In Europe today, major indices are on the rise led by France’s CAC and the UK FTSE
European PMI reports were in line or better than expected or showed improvement over the previous month for the most part. The one exception was Norway which missed badly and raises concerns about today’s Canadian PMI report particularly in the wake of BoC Governor Poloz’s recent comments on the apparently “atrocious” performance of the Canadian economy (which did not show up in yesterday’s January Canada GDP report). Today’s Canadian PMI number could spark more trading action in CAD later this morning.
The soft ADP numbers also helped to shore up support for US indices which had been falling this morning, enabling them to stabilize. US markets may be active through the morning with US PMI, construction spending and oil inventory reports still on the way.
There have been no major corporate announcements this morning.
Economic reports released overnight and this morning include:
US ADP payrolls 189K vs street 225K, previous revised up to 214K from 212K
Japan Tankan Q1 Large Mfg index 12 vs street 14
Japan Tankan Q1 Large Mfg outlook 10 vs street 16
Australia building approvals 14.3% vs street 10.7%
Australia commodity Index (19.7%) vs previous (20.6%)
New Zealand QV house prices 7.7% vs previous 6.4%
Manufacturing PMI reports:
Australia 46.3 vs previous 45.4
China official 50.1 vs street 49.7
China non-manufacturing 53.7 vs previous 53.9
Japan 50.3 vs previous 50.4
China HSBC 49.6 vs street 49.3
Sweden 54.1 vs street 54.2
Norway 48.8 vs street 51.3
Spain 54.3 vs street 54.8
Italy 53.3 vs street 52.1
France 48.8 vs street 48.2
Germany 52.8 vs street 52.4
Greece 48.9 vs previous 48.4
Eurozone 52.2 vs street 51.9
UK 54.4 as expected
Economic reports due later today include:
10:00 am EDT US construction spending street (0.1%)
10:30 am EDT US crude oil inventories street 4.2 mmbbls
Manufacturing PMI reports:
9:00 am EDT Brazil previous 49.6
9:30 am EDT Canada previous 48.7
9:45 am EDT US Markit street 55.3
10:00 am EDT US ISM street 52.5