At 8:15 am New York time (12:15 GMT), US-based payroll processing company ADP is expected to release its National Employment Report for March. The consensus forecast, based on the median estimate of economists surveyed by Bloomberg News, calls for a month-to-month increase of 206,000 US jobs.
Tradeable volatility on the US dollar pairs has been largely absent during the hour following the release of the past twelve ADP reports. By contrast, the Japanese yen has generally shown more sensitivity to this report, and profitable post-news trades have materialized following two of the past dozen releases. The EUR/JPY, for example, rose more than 100 pips from its pre-news level during the three hours following the release of the June report in early July of last year. On 30 November, a long trade setup on that same pair yielded up to 70 pips following the ADP release.
However, one must be aware that a significant differential between the consensus forecast and the headline figure does not guarantee a sustained one-way move by the yen. The December print of 325,000 nearly doubled the median forecast, yet the euro struggled to make material gains against Japan's currency.
The currency market could be more sensitive to forthcoming reports reflecting the health of the US jobs sector than it was prior to Federal Reserve Chairman Ben Bernanke's labor market speech last week. However, two things could complicate market reaction to Wednesday's ADP report: (1) the European Central Bank (ECB) is scheduled to begin its post-meeting press conference just 15 minutes following the ADP news; and (2) correlation with the US Labor Department's non-farm payrolls (NFP) report has been spotty at best.
Curt Wehrley Twitter: @fxcoachcurt Currency Coach & Quantitative Analyst FX Bootcamp
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