With ADP, jobless claim and consumer confidence favouring a stronger labour report tonight, EUR/USD could suffer further losses.
US ADP Non-Farm employment change surpassed forecast, coming in at 275k versus 181k. CB consumer confidence was also better than expected, coming in at 129.2 versus the estimated 126.2. Even though jobless claims ticked higher, it is still considered soft on a historical basis at 230k. The tick up can be largely attributed to the Easter holiday.
- Markets are estimating similar job growth and unemployment rate tonight.
- The focus will be on wages after a slowdown last month to 0.1%. We expect it to pick up back to the estimated 0.3%.
- Eurozone CPI will also be announced tonight, and data is estimated to improve. However, with the past few eurozone data missing estimates, we believe that tonight’s inflation data will fall short as well.
- Even though weaker inflation would not justify a rate cut from the ECB, it could instead lead to an extension in targeted longer-term refinancing operations (TLTRO) terms in June.
- EUR/USD could head towards the 1.1130 price level if eurozone’s inflation disappoints and US wage improves.
Fullerton Markets Research Team
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