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ADP result surprised the market, all eyes switched to NFP


U.S. equities continued to fall throughout Thursday’s trading. Equities retreated due to the upside surprise from the ADP nonfarm employment change, which showed that employers added 235,000 jobs in December, and initial jobless claims, indicating 204,000 claims in December. The two red-hot job reports affirmed the Fed’s reservations on the contractual effectiveness of its interest rate hikes. The tight labour market report sparked a rally in treasury yields and the U.S. Greenback.

The Dow Jones Industrial Average dropped 1.02% to close at 32930.08. The S&P 500 lost 1.16% to close at 3808.1. The tech-heavy Nasdaq Composite slumped 1.47% to close at 10305.24. The U.S. 10-year treasury yield was last seen trading at 3.725%.

Equities were dragged down by the downside surprise of earnings results released by Walgreens (NAS: WBA) and Bed, Bath & Beyond (NAS: BBBY). Walgreens, which dropped more than 6% over yesterday’s trading, showed a $5.2 Billion opioid litigation settlement that dragged quarterly earnings. Bed, Bath and Beyond plummeted more than 29% after the company announced cash insufficiency and possible chapter 11 bankruptcy.

Main Pairs Movement

The Dollar Index, which tracks the U.S. Greenback against a basket of other major foreign currencies, rose more than 0.8% throughout yesterday’s trading. The ADP nonfarm payrolls and initial jobless claims, both coming in above market expectations, buoyed the Dollar higher as short-term U.S. interest rate expectations continue to price higher across markets.

EURUSD dropped 0.76% throughout yesterday’s trading. The Euro fared worse against the Dollar as market participants bid up the Greenback due to hotter-than-expected job reports. The construction PMI further indicated price levels remaining at elevated levels.

GBPUSD slumped 1.25% throughout yesterday’s trading. The British Pound weakened against the Dollar due to the broad-based Dollar’s strength. The British construction PMI is scheduled for today’s European trading session.

Gold lost 1.18% throughout yesterday’s trading. The Dollar denominated Gold lost ground as the U.S. Greenback surged across the board.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
GBPConstruction PMI (Dec)17:3049.6
EURCPI (YoY) (Dec)18:009.70%
USDNonfarm Payrolls (Dec)21:30200K
USDUnemployment Rate (Dec)21:303.70%
CADEmployment Change (Dec)21:308.0K
USDISM Non-Manufacturing PMI (Dec)23:0055
CADIvey PMI (Dec)23:0051