US ADP - Flat Print market just hiccups

Today on March 7th 2012 at 13:15 GMT (8:15 EST) the ADP figures were released from the USA. These figures are said to be a leading indicator for Friday highly anticipated NFP release. Not sure however how accurate it is at forecasting the NFP, regardless if it has a big enough deviation from expectations the market will rally. Today it was flat however and the market just did a little hiccup and then continued.

The market is awaiting the NFP on Friday and also the ECB will announce their latest Interest Rate decision tomorrow along with Mario Draghi's Press Conference. To top it off the deadline for the Greek PSI Bond Swap Deal is 8pm GMT on Thursday and the market has been reacting to headlines about the % of PSI voluntary participation in the deal. If the level is not high enough there maybe CAC (collective action clauses) invoked on those who do not accept the deal and this could trigger some CDS (Credit Default Swaps)...the whole maneuver appears specifically to be designed to get around the legal phrasing of the CDS so Greece can do some sort of orderly default without crumbling the whole house of cards which all these derivatives have built up. One thing triggering another and on and on.

Here is the data:

US ADP
Estimates -> Median: +215k Average: +211k Low: +120k High: +270k
Actual: +216k Prior: +170k Revised: +173k

About a 15 minutes later 2 smaller reports were released, these normally don't get much attention:


US Nonfarm Productivity
Estimates -> Median: +0.8% Average: +0.9% Low: +0.5% High: +1.6%
Actual: +0.9% Prior: +0.7% No Revision

US Unit Labor Costs
Estimates -> Median: +1.2% Average: +1.4% Low: +0.7% High: +2.8%
Actual: +2.8% Prior: +1.2% No Revision

Here is the 15 second chart of the EMini S&P 500 Future:

This is the 15 second chart of the DAX

Just to be complete here are the 1 minute charts of the USDJPY and CADJPY forex pairs, they usually are quite good at following the movement Stock Indices. You can see they just wiggled a bit when the data was released. However the Yen Crosses have been rallying hard over the past 2 weeks but took a break and retraced during the 1st half of this week. This move was due as they were quite overbought. They seemed to get some attention in and have started to bounce off these retracement levels.

US ADP Employment Change - Small Deviation lower does not affect the market much

Today Wednesday 1st February 2012 at 8:15 EST (13:15 GMT) the ADP employment figures were released from the USA. There was a small deviation lower of about 12k which is not large enough to take any trade. There was also a revision to the previous month of -33k which even with the 2 added together is still not enough...something more like a 70k deviation from expectations is good although 50k can work it is not reliable. Also it is best when the deviation is for the current month, not a revision. Here are the figures:

US ADP Employment Change
Estimates: Median: 182k Average: 188k Range: 145k to 300k
Actual: 170k Prior: 325k Revised: 292k

The markets had been rallying during the european session and basically this slightly worse data was not enough to stop them. Here is a 1 minute chart of the EMini S&P 500 future which bascially went sidewise but started to pick up as the US cash equity open approached at 9:30 EST (14:30 GMT) and then continued into the release of the US ISM Manufacturing PMI release:

Also included is a 5 minute chart of the CADJPY which shows the move from the european session into the ADP data and then on until it hit resistance at 76.50. Notice the small dip in the uptrend as the data came out:

US ADP Employment Change - much higher deviation leads to nice spike

A very big upward deviation on the ADP Employment Change from the USA released today at 13:15 GMT (8:15 EST). This sets up the big data for Friday, the Non-Farm Payroll to come out higher. There was nice rallies on the EMini S&P 500 and the Yen Crosses as a little bid came back into risky assets after the battering they had taken during the European morning as the European Banking sector got hit on fears about Italy's Unicredit and Deutsche Bank.

This was followed 15 minutes later by the weekly Initial Jobless Claims from the USA. This figure did make a new low for 2011 on December 15th of 366k, which broke the low from late February and shows that unemployment is slowing in the USA. There is also a weekly Continuing Claims number released at the same time slot at half past. Today's Initial Jobless Claims figure did not break the December 15th 366k low but it did stay below the important 400k level.

Here are the figures:

US ADP Employment MoM
Estimates: Median +178k Average +177k Range +125k to +230k (150-200 most)
Actual: +325k Prior: +206k Revised: +204k

US Initial Jobless Claims WoW
Estimates: Median +375k Average +377k Range +365k to +390k
Actual: +372k Prior: +381k Revised: +387k

US Continuing Claims WoW
Estimates: Median +3570k Average +3567k Range +3500k to +3650k
Actual: +3595k Prior: +3601k Revised: +3617k

First chart is the 1 minute chart of the EMini S&P 500 future, a good 6 point (24 tick) move:

Next a 30 second chart of the USDJPY, although not so many pips a solid move, notice the move accelerates further after the Initial jobless claims release 15 minutes later:

Finally a 10 second chart of the CADJPY which had a nice spike in reaction to the large positive deviation seen on the US Monthly ADP figure release, and mirroring the move seen in the EMini S&P: