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 ISM Non-Manufacturing PMI - Small Deviation Higher

This Afternoon at 15:00 GMT (10:00 EST) on Monday March 5th the ISM non-Manufacturing figures were released from the USA. Last week's Manufacturing PMI figures were actually quite lower on Thursday at 52.4 versus 54.5 expected which lead to sell off. These PMI figures have been coming out quite good from the USA in the past few months and have received alot of attention from the market who are all watching for signs of a recovery from the US.

Last month this figure was release in the aftermath of the NFP data and was a very good print, adding extra fuel to the already quite large rally that came on the back of the better NFP data. However this indicator in month's prior has caused whipsaw on smaller deviations and thus it is always best to wait for a good sized deviation of somewhere between +/-2.5 to 3.0 to get into a trade. Today's print was better but the only a +1.3 deviation.

Here is the data:

US ISM Non-Manufacturing PMI
Estimates- Median: 56.0 Average: 56.2 Low Estimate: 54.0 High Estimate: 59.0
Actual: 57.3 Prior: 56.8 No Revision

US Factory Orders
Estimates- Median: -1.5% Average: -1.5% Low Estimate: -3.0% High Estimate: +0.5%
Actual: -1.0% Prior: +1.1% No Revision

The Stock Indices have been best to trade on US data. Personally I watch the Futures, but an ETF or CFD are also options. Here is the 15 second chart of the EMini S&P 500 Future Contract, at the bottom is the Volume. There was a whipsaw initially which did work up higher in agreement with the deviation but it gave way to a further sell-off.

The DAX future has alot bigger moves than the EMini which is actually quite a sluggish instrument to trade unless there is some big news pushing it around. The whippyness was thus even worse on the DAX after this release, however it too followed the EMini up for some gains given enough wiggle room. This is a 15 second chart of the DAX Future.

However these gains were short lived and the drop was much more steep in the DAX than what was seen on the EMini. Here is the 1 minute chart of the DAX.

If you are stuck to forex then the CADJPY usually is quite well correlated to the Stock Indices. Here the CADJPY makes about 20 pips before falling over as again the major Indices did. Here is the 1 minute chart of the CADJPY forex pair:

This 1 minute chart of the USDJPY chart shows the pair lift about 15 pips. Just a few months ago we could not be sure the USDJPY would react reliably to US news, but in the past couple of weeks the pair has woken up from its hibernation and has found renewed upward momentum. A bit overbought now and probably due for a correction, but in the longer term we could see further gains in the pair up to 85.00 initially. Anyhow all this focus and attention in the market is getting more traders interested in the pair and thus it is in play and reacting better to news.

US NonFarm Payroll - Much Higher Risk-On except for European Currencies and Gold

This Friday, February 3rd 2012 at 8:30 EST (13:30 GMT) the montly payroll data from the USA was released. This is basically an indication of the Employment Situation and is the most well known and widely watched piece of economic data known to the market. Almost every market instrument will move based on this data. If there are jobs in the USA then there will be confidence and Americans will have money in the pockets to buy stuff...whether houses from the large stock available or things fabricated in China.

Earlier in the week on Wednesday the ADP data came out slightly lower. This is a smaller sample but it gives an advanced indication of what is likely to happen with the NonFarm Payroll Number.
There are other economic data figures which attempt to gauge the employment situation in the USA. The weekly Initial Jobless Claims for instance has been coming out below 400k since December 2011. This broke the low seen in February 2011 and the number has been consistently at around 360k now. The Challenger Job Cuts was higher however, which indicates more people were laid-off from their jobs. The Employment Component of ISM Manufacturing PMI was also slightly lower, but Consumer Confidence definately has been up. Anyhow despite all these advanced readings on the day there is little you can do to predict what the NonFarm Payroll number will be unless you have special connections or something. This time there was an upward surprise. Here is the data:

US Change in Nonfarm Payrolls
Estimates- Median: +140k Average: +146k Range: +95k to +225k
Actual: +243k Prior: +200k Revised: +203k

US Change in Private Payrolls
Estimates- Median: +160k Average: +162k Range: +110k to +250k
Actual: +257k Prior: +212k Revised: +220k

US Change in Manufacturing Payrolls
Estimates- Median: +12k Average: +14k Range: +9k to +25k
Actual: +50k Prior: +23k Revised: +32k

Unemployment Rates
Estimates- Median: +8.5% Average: +8.5% Range: +8.3% to +8.7%
Actual: +8.3% Prior: +8.5% No Revision

Average Hourly Earning MOM All Emp
Estimates- Median: +0.2% Average: +0.2% Range: 0.0% to +0.3%
Actual: +0.2% Prior: +0.2% Revised: +0.1%

Average Hourly Earning YOY All Emp
Estimates- Median: +1.9% Average: +1.9% Range: +1.8% to +2.0%
Actual: +1.9% Prior: +2.1% No Revision

Average Weekly Hours All Employees
Estimates- Median: 34.4 Average: 34.4 Range: 34.3 to 34.5
Actual: 34.5 Prior: 34.4 Revised: 34.5

Change in Household Employment w/Pop
Actual: 847 Prior: 176 No Revision

Underemployment Rate
Actual: 15.1% Prior: 15.2% No Revision

So where to start. Of course there were some nice moves, however while the commodity currencies forex pairs rallied the european currencies sold off. Gold sold off while Crude rallied. We will start with the Stock Index Futures, these are actually the most reliable to trade on US news in general these days. Here is the 1 minute chart of the Emini S&P 500 Future and the DAX Future:

After the Stock Index futures the CADJPY or another Commodity Currency like Australian dollar or New Zealand versus the Japanese Yen, AUDJPY or NZDJPY. Here is the 10 second chart of the CADJPY:

and this is the 1 minute chart of the CADJPY to show more of the move:

It is always good to keep an eye on the USDJPY, although the moves are not always so many pips. Here is the 10 second chart of the USDJPY:

and a 1 minute chart of the USDJPY to show more of the move:

So now a 30 second chart of the EURUSD will show how it moved down on the release. It did briefly run up about 30 pips but then dropped 120 pips:

In contrast to the AUDUSD which spiked up, pulled back, and kepted rallying. The GBPUSD, USDCHF, USDNOK followed the Euro by weakening against the Dollar, only the Swedish Krona escaped the sell-off in European Currencies. The NZDUSD, USDCAD, USDZAR and Asian Currencies all rallied against the US Dollar much like this Australian Dollar did in this 1 minute chart of AUDUSD:

Also here is the 1 minute chart of Gold. It was whippy initially, basically it lost some of its shine as a safe-haven when better employment in the USA meant risk appetite. Interesting to note shifting correlations, Crude Oil did rally in contrast:

US ISM Manufacturing - slightly off estimates but still not bad

Today on Wednesday 1st of February at 10:00 EST (15:00 GMT) the ISM Manufacturing PMI figures were released from the USA. There came out slightly below estimates but still quite high, especially in comparison to Europes figures which were released earlier, although Europe is recovering a bit for the much worse PMI figures a few months ago. Anyway the negative deviation was no where near where we would get interested in selling.

Here are the figures:

US ISM Manufacturing
Estimates- Median: 54.5 Average: 54.4 Range: 53.0 to 56.0
Actual: 54.1 Prior: 53.9 No Revision

US ISM Prices Paid
Estimates- Median: 50.0 Average: 50.2 Range: 48.0 to 53.0
Actual: 55.5 Prior: 47.5 No Revision

The Session was risk on in general. The better Eurozone PMIs and hope that a deal on the Greek PSI would be coming soon lifted risk appetite. So although this was slightly off it still was pretty good considering everything and the risk-on move continued. First is the S&P 500 EMini Futures 1 minute chart. Despite an initial wiggle or whipsaw it did resolve higher:

Here is the 1 minute chart of the DAX Future which moves in tandem with the US indices on US news.....usually:

The CADJPY did continue up some 30 pips, taking its time...here is the 5 minute chart of CADJPY:

The USDJPY stayed most flat until it hit a lumpy bid about 2 hours later, still the cross remains under pressure despite the fake trendline break before the FOMC last week. Here is the 5 minute chart of the USDJPY:

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 Chicago PMI

Today on Tuesday 31st of January 2012 at 9:45 EST (15:45 GMT ) the Chicago PMI figures were released from the USA. This economic indicator has rebounded nicely from may but today it did come out lower and actually did cause a bit of risk off. This was unexpected because in many cases the market has not reacted predictably on this news releases, even when there are significant deviations.

Here are the figures:

US Chicago PMI
Estimates: Median: 63.0 Average: 62.6 Range: 59.0 to 67.0
Actual: 60.2 Prior: 62.2 No Revision


It appears as the market waits for NFP it is content to run to the extremes intraday as the market had rallied from the New york session the previous day, thru asia and europe just to sell off again when NY opened again. Here is the 1 minute chart of the EMini S&P 500 future. There is a blue line marked at 9:42 est which is where this data is released to special subscribers before the general release 3 minutes later:

This is a 10 minute chart which shows the EMini S&P 500 future rally from the day before into this news:

Next is the 30 second chart of the USDJPY. This pair usually does not move many pips but it did go in the direction of the deviations:

Now the CADJPY 30 second chart, which had a better move and follows the main stock indices like the S&P 500 very well:

However remember that there was Canadian GDP at 8:30 est about 75 minutes before this news, so the Canadian Dollar was still be affected by that. Here is a 1 minute chart of the CADJPY Forex pair which shows the whole move on the pair thru the Canadian GDP and the US Chicago PMI. Luckily the weaker Canadian GDP agreed with the lower US Chicago PMI figures both in terms of the Canadian Dollar and the risk-off price flow:

US GDP Advanced for Q4 2011 - High Expectations slight disappointment but good moves

This friday January 27th 2012 at 8:30 EST (13:30 GMT) the Advanced or 1st reading of GDP for Q4 2011 was released from the USA. The expectations for this were quite high, considering that the Final Reading for Q3 was +1.8%, to jump to +3.0% is nearly doubling growth. As the expectation was quite high some probably considered that a small miss of the expectation would not cause a major sell off, but in the end it did provide a decent move down, although later on in the session things rebounded and there was a rally into the close for the week. Alot of these was do to good headlines about a deal on the deal with PSI about a haircut on Greek Debt, that an agreement was close.

Anyway here is the data:

US GDP QoQ (Annualized) Advanced Q4 2011
Estimates- Median: +3.0% Average: +3.0% Range: +2.4% to +4.5%
Actual: +2.8% Prior: +1.8% No Revision
US GDP Price Index
Estimates- Median: +1.9% Average: +1.7% Range: +0.6% to +2.6%
Actual: +0.4% Prior: +2.6% No Revision
US Core PCE QoQ
Estimates- Median: +0.9% Average: +1.1% Range: +0.8% to +2.4%
Actual: +1.1% Prior: +2.1% No Revision
US Personal Consumption
Estimates- Median: +2.4% Average: +2.4% Range: +1.2% to +3.6%
Actual: +2.0% Prior: +1.7% No Revision

Here are some charts then, first is the Emini S&P 500 Future 1 minute chart:

Also another option for stock index futures is the DAX, or the FTSE, any major index will move with the EMini and DOW on US news. I like the DAX:

In Forex the CADJPY follows the Stock Indices quite well. Any Commodity Currency (AUD,NZD,CAD...or even ZAR or NOK probably will have to review those charts) versus the Japanese Yen will generally follow the stock indices, sometimes Canadian News comes out at the same time as US News so you have to watch out for that. This is the 10 second chart of the CADJPY:

Last month the USDJPY did not follow the lower print and actually moved up (only a small amount of pips). This time it did follow everything down, but normally this pair is avoided since it really doesn't move that much most of the time. Here is the 30 second chart of the USDJPY forex pair:

Actually it was risk-off across the board the USD dollar rallied as well with AUDUSD, NZDUSD, GBPUSD and EURUSD selling off. Although the JPY did appreciate more than the USD on this risk-off move as can be seen by the USDJPY chart above. Here are 2 more charts of AUDUSD and NZDUSD, this time 5 minute chart and you can see more price action. Later on in the US Session as mentioned the deal on PSI haircuts looked close also 90 minutes after GDP the University of Michigan Consumer Sentiment figures were released at 10:00 EST (15:00 GMT). This data has rebounded nicely since some bad prints during August 2011. Now the figure is coming back up to 2 year highs. Here is that data:

US U. of Michigan Confidence
Estimates- Median: 74.0 Average: 74.3 Range: 72.5 to 76.0
Actual: 75.0 Prior: 74.0 No Revision

Finally these 2 charts are GMT+2 and also the Green line at the top is the R1 pivot, which AUDUSD tagged perfectly and sold off from, while NZDUSD overshot a bit. The Red Arrow is the release of GDP while the Blue Arrow is the release of U. of Michigan Confidence. The NZDUSD found support right on the Yellow horizontal line which is the Daily Central pivot:

Fed Interest Rate Statement, FOMC Meeting Minutes & Feds Press Conference = Risk On Rally Extension

Today January 25th at 12:30 EST (17:30 GMT) the Fed released their interest rates which were left unchanged as predicted. They also released a Statement, which basically push the forecasted date of their 'exceptionally low fed funds rate' from mid-2013 last time to the end of 2014 with this statement, see the statement differences side-by-side here. This was a bullish statement which lead the markets to rally. As can be seen in the statement little else changed other than slight reordering of the phrases, other than this key statement.

The markets took off, all risky assets rallied, only space to focus on a few. First the 10 second chart of the EURUSD:

and a 30 second chart which shows the rally extending up to 1.3100 until 14:00 when the FOMC Meeting Minutes were released:

Here is the 3 minute chart of the EMini S&P 500 :

So 1.5 hours after this initial statement the FOMC Meeting Minutes were released, of course there was alot they discussed. What stood out at the time was that 3 members were discussing hiking rates this year as well as the Fed adopting a specific inflation target. There were also revisions to their forecasts for GDP, PCE Inflation and Employment. The EURUSD took a 50 pip dive from the 1.3100 round figure based on this news.

Here is a 10 second chart of the EURUSD based on this response to the FOMC Meeting Minutes:

Then 15 minutes later the Fed's Press Conference started where Ben Beranke answered questions of journalists. Many things were said and it went on for some time, see more here, here, here & here, New Zealand Interest Rates and statements were released at 15:00 while this Press Conference was still going on, so it was a bit of an overload. Basically the Fed sounded more upbeat, that they will continue their monetary policies even if things improve and giving some hint of QE3 for possibly March. Basically the Fed has their foot on the pedal. The dip seen from the 14:00 FOMC minutes reversed and even higher highs were made accross all the markets.

There is a 5 minute chart of the EURUSD which shows more of the move thru all these events:

Interesting to point out Gold here as it breaks out a major trendline on the Daily Chart:

Yesterday Gold had come right up to this trendline and started bouncing off it. Here is a 30 minute chart showing this:

This is the 5 minute chart of Gold from the start of the 12:30 Statement. The time on the chart is GMT+2:

US Pending Home Sales - Sell the Rumor Buy the News

A half an hour after the New York Cash Stock Equity Open at 10:00 EST (15:00 GMT) the Pending Home Sales figures were released. There were some negative headlines out of Europe about Greece and Portugal later in the European mid-day which gave the risk-on sentiment a pullback. The Emini S&P 500 sold off as the 9:30 open passed and headed down in the half hour leading into the News.

This really isn't the best economic news release to trade as everyone knows that housing is generally bad anyhow. In the past we have watched the USDJPY on US news but really the EMini S&P 500, the DOW or really any of the major Stock Indices generally follow US news quite well. The USDJPY does work but usually doesn't move many pips, perhaps 10. Here the figures:

US Pending Homes Sales MoM
Estimates- Median: -1.0% Average: -0.8% Range: -8.1% to +7.0%
Actual: -3.5% Prior: +7.3% No Revision
US Pending Homes Sales YoY
Actual: +4.4% Prior: +6.9% No Revision
US Home Price Index MoM
Estimates- Median: 0.0% Average: 0.0% Range: -0.5% to +0.5%
Actual: +1.0% Prior: -0.2% Revised: -0.7%

This is not large enough deviation trade, normally something closer to +/-5.0 or more, so this was a small -2.5 deviation and as the EMini had sold off into the news there was a good chance of a bounce back on a 'less worse than it could have been' type of rebound. Here is the 1 minute chart of the EMini S&P 500 from a spreadbet broker:

If you are stuck to just trading Forex, then the CADJPY is a good pair to trade because it has a good correlation to the main stock indices, which are driven by risk-on/risk-off price flow dynamic. Here is the 1 minute chart of the CADJPY forex pair:

US Philly Fed - Rumor of higher print but then lower print

Market has been near the tops since the US CPI numbers, then at 10:00 EST (15:00 GMT) the Philadelphia Manufacturing Index came out. This number has rebounded from the horrible -35 or so print back in august 2011, but now it has gained ground back above 10. The risk-on theme continued and about 5 minutes before the news there was a rumor that came thru talking-forex.com that the number would print higher. This geared market expectations and then when it came out lower probably trapped some longs. Here are the figures:

US Philadelphia Fed
Estimates- Median: 10.3 Average: 10.5 Range: 7.0 to 16.8
Actual: 7.3 Prior: 10.3 No Revision

Here is a 1 minute chart of the EMini S&P500 future which shows how it moved down after the -3 dev. This is normally not a big enough deviation from the expected figure to trade on.

Here is a 30 second chart of the CADJPY, notice the spike into the release on that rumor. Then came down. Of course it was only a small lower deviation and the rest of the news has been good and a risk-on day, so after awhile cadjpy found some bids and rallied past those highs again.

Finally the USDJPY went sidewise for a half hour but then found some bids and rallied significantly for this pair:

US ISM Non-Manufacturing - Slightly lower print punctuates dowswing from the Open

Risk off day as problems with European banking sector hit the market. US market had already digested some good ADP numbers and slightly better weekly jobless numbers. Stock indices sold off as the New York cash equity opened and this ISM release was slighted for half an hour later. This slightly lower deviation caused a little extra selling pressure to pierce some lows and basically punctuate the low before reversing. It was not a big enough deviation to cause much of a move.
The Ivey PMI figures for Canada were released at the same time.

Here the figures:

US ISM Non-Manufacturing Index
Estimates: Median 53.0 Average 53.1 Range 52.0 to 55.0 (52.5-53.5 most)
Actual: 52.6 Prior: 52.0 No Revisions

CAD Ivey PMI
Estimates: Median 58.0 Average 58.4 Range 56.0 to 61.0
Actual: 63.5 Prior: 59.9 No Revisions

First chart is the 1 minute chart of the EMini S&P 500 Futures Contract. The 3pm GMT (10am EST) release brought a slightly lower low which then brought about a reversal higher:

Next the 30 second chart of the USDJPY, which had rallied since the good nearly +150k deviation on the 13:15 GMT (8:15 EST) release of US ADP, it did sell off a bit on the news:

Finally the 30 second chart of the CADJPY is interesting as the strong Canadian Ivey PMI data did not move the pair up initially as it is so highly correlated to the Stock Indices and the risk appetite/aversion dynamic in the market: