The European session is boring today because it is Labor Day. Things will get a lot more interesting in the US session, as we get key US economic data and then end the day with the FOMC rate decision. Let’s break down the upcoming data releases and see what the likely impact on the market could be.
ADP US 12:15 GMT (08:15 ET)
American ADP
US ADP is expected at 175K versus 184K previously. Last month, the data surprised on the upside with the biggest increase in hiring in eight months. The worrying part was the annual salary change which showed an unchanged rate of 5.1% for people remaining in their jobs and a significant jump to 10.1% from 7.6% previously for people who changed jobs. The problem here is that a resilient labor market with increasing wage growth could not only stop the disinflationary trend, but even reverse it.. This is something the Fed will want to avoid. Therefore, pay attention to today’s wage gains data as an upside surprise could fuel another hawkish market reaction with more buying momentum for USD across the board and more downside for bonds, stocks and gold.
US Manufacturing ISM PMI 2:00 p.m. GMT (10:00 a.m. ET)
US ISM Manufacturing Index
The US ISM manufacturing PMI is expected to fall to 50.1 from 50.3 previously. Last month, the index expanded for the first time after 16 straight months of contraction, with comments generally upbeat. The latest US S&P Global Manufacturing PMI returned to contraction after expansion in the first quarter of 2024. This time around, the commentary was rather gloomy, with even mentions of heavy layoff activity, although there was also some good news on the inflation front.. The ISM report is generally considered more important by the market, therefore it will be used to confirm or deny the S&P Global result.
If the data surprises on the upside, it will likely trigger a hawkish reaction as the market completely eliminates some latent concerns from the S&P Global survey and leads to more bids on the dollar and bids on bonds, stocks and more. ‘gold. Conversely, if the data surprises on the downside, the market could reverse some of the movements seen in recent days.
Job openings in the United States at 2:00 p.m. GMT (10:00 a.m. ET)
Job offers in the United States
Job openings in the United States are expected at 8.680 million compared to 8.756 million previously. This will be the first major US labor market report of the week and, although it is old (March data), it is generally a publication that evolves in the market. The latest report saw a slight setback with negative revisions from previous figures, highlighting a resilient albeit normalizing labor market. The market will also focus on hiring and departure rates, as they have both fallen below the pre-pandemic trend of late. This report will be overshadowed by the ISM Manufacturing PMI but be careful of big surprises because they could exacerbate or even reverse the movements of the ISM publication.
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