Article Highlights

  • ADP non-farm employment change up by 179K vs. 171K forecast
  • U.S. ISM non-manufacturing PMI down from 56.5 to 55.5 vs. 56.0 consensus
  • U.S. final services PMI up from 50.9 to 51.4
  • U.S. crude oil inventories up by 1.4 million barrels
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The Greenback refused to be outdone by its forex rivals in the latest New York session, as it rallied on the heels of upbeat data and risk aversion.

Major Events:

U.S. economic data First off, the ADP non-farm employment change report printed a stronger than expected 179K increase versus the projected 171K gain and the previous 176K rise in hiring. Although the ADP report isn’t exactly the most accurate preview of the actual NFP release, forex junkies couldn’t help but get their hopes up for a likely upside surprise for Friday’s jobs report as well.

However, the ISM non-manufacturing PMI slid from 56.5 to 55.5, lower than the projected drop to 56.0. Components of the report indicated a drop in the employment sub-index, which was down from 52.7 to 51.4 for the month.

The prices sub-index also reflected a decline from 55.5 to 51.9 but new export orders saw a decent increase from 53.0 to 55.5. To top it off, Markit’s version of the services PMI was upgraded from 50.9 to 51.4 to indicate a faster pace of industry growth.

Crude oil bounce – Oil inventory data from the U.S. Energy Information Administration showed a buildup of 1.4 million barrels in stockpiles instead of the projected reduction of 1.6 million barrels. This marks the second consecutive week of gains in oil inventories as market participants continued to buzz about an oversupply in the market.

Traders seem to have already seen this coming, though, as the impact on crude oil prices wasn’t so bad. In fact, WTI crude oil even staged a recovery later in the trading session to close at $40.83/barrel. As it turns out, analysts turned their attention to the sharp drop of 3.3 million barrels in gasoline supplies and the decline in daily production to 8.46 million barrels.

Major Currency Movers:

USD – The dollar managed to score strong gains against most of its forex peers, except against the oil-related Loonie.

EUR/USD plummeted from 1.1203 to to 1.1146 (-0.51%), GBP/USD put up a strong fight but was still down from 1.3355 to 1.3315 (-0.30%), USD/JPY pulled up from 101.08 to 101.19 (+0.10%), USD/CHF bounced off .9681 to a high of .9739 (+0.59%), AUD/USD retreated from the .7600 handle to .7585 (-0.19%), but USD/CAD slid from 1.3100 to close at 1.3071 (-0.09%).

Watch Out For:

  • 1:30 am GMT: Australia retail sales (0.3% expected, 0.2% previous)

See also:

Asian Session Recap

London Session Recap

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