The attention of the market today will be completely focused on the publication of US employment data from ADP. They traditionally precede the official values of the Ministry of Labor, which will be presented on Friday
According to the ADP forecast, the US economy received 600,000 new jobs in June, which is significantly lower than the May value of 978,000, but in general, it fits into the overall picture of employment dynamics in the post-pandemic period.
The situation in the labor market remains an important indicator of the recovery of real economic activity in the US. Those companies that moved their production to China or other countries in the Asian region a long time ago have suffered slightly and do not depend on the growth or fall in the number of new jobs in America. However, there is still a significant layer of companies that are fully dependent. In such a case, investors continue to closely monitor the behavior of an important macroeconomic indicator – unemployment, which shows how real things are in the country's economy.
If everything is not so bad with regard to the dynamics of the recovery of business and industrial activity as a whole, and we will not succumb to the Fed's overly optimistic statements, because they have such a job to be "optimists", the labor market situation clearly shows that its recovery has not yet occurred in view of the consequences of the pandemic and the reluctance of low-paid workers to go back to work, preferring to wait for benefits from the government.
How will the currency market react today?
We believe that if the data turns out to be higher than the forecast, it will be regarded by the market as a good signal and will lead to an increase in demand for company shares and a weakening of the US dollar. But if the values are pumped up and will be noticeably lower, then this will cause a wave of investors leaving the risky game and will lead to a decline in stock indices and a partial recovery of the national currency. In any case, the market dynamics will most likely be limited, since it will be interested in the official employment figures, which will be released on Friday.
Forecast of the day:
The EUR/USD pair is trading below the level of 1.1915. Strong values of new jobs from ADP will allow the pair to further rise to 1.2000. At the same time, it is noticeably weaker to its decline to 1.1845.
The AUD/USD pair is rising amid the recovery in demand for commodity assets and will continue to do so if US employment news is positive. In this case, the pair will surge to the level of 0.7615. But if the numbers are negative, it will likely decline to 0.7475.
