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ADP Non-Farm Employment Change, Jobless Claims, FOMC Meeting Minutes

calendar 03/07/2024 - 07:35 UTC

The U.S. dollar showed little change against most major currencies on Tuesday, with the dollar index (USDX) ending the session almost unchanged, close to the 105.4 mark ahead of a busy economic calendar that could provide valuable data for the Fed's upcoming interest rate decision.

In a speech held in Portugal, Fed chairman Powell has predicted that inflation in the U.S. may return to the central bank's 2% target by late 2025 or the following year but flagged that policymakers will "take their time" before rolling out potential interest rate cuts.

According to the CME FedWatch tool bets for a September rate cut increased to 63.2% while bets for a November rate cut follow closely at around 52.1%.

The main U.S. stock indices posted a mild recovery on Tuesday, with the US 500 up by 0.61%, the US 30 rising by 0.44% and the US tech 100 gaining by more than 1%, boosted by gains in Tesla and other megacap stocks, however, volumes remain thin ahead of the July Fourth holiday.

Tesla surged 8.8% to its highest level since the start of January after the EV maker reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter. Megacap stocks such as Apple, Amazon and Alphabet also edged up, while U.S. Treasury yields fell.

All eyes now turn to Friday's non-farm payrolls report for clues on when the Fed will begin rate cuts. Economists are expecting the U.S. economy to have added 189,000 jobs in June after a larger than forecast gain of 272,000 the previous month. Some price action could also be observed later in the day upon the release of US jobless claims, ADP employment data, US factory orders and manufacturing data, crude oil inventories and the long awaited FOMC meeting minutes.


EUR/USD spent Tuesday in a churning pattern, ending the session with minor gains of 0.11%.

Pan-EU HCOB Core Harmonized Index of Consumer Prices (HICP) inflation held steady at 2.9% MoM in June, holding steady at the previous figure and snubbing the forecast decline to 2.8%. Overall YoY HICP inflation eased to 2.5% as forecast, ticking down from the previous 2.6%, but European inflation figures remain notably above the European Central Bank’s (ECB) 2% target band.

US JOLTS Job Openings rose slightly in May, climbing to 8.14 million. Indicators of increasing slack in the US labor market are starting to emerge, providing the rate-cut-desiring financial markets with optimism that the Fed may be compelled to implement a rate reduction sooner rather than later.

Wednesday’s upcoming European market session will see final Producer Price Index (PPI) and HCOB Purchasing Managers Index (PMI) figures, while the US trading window features ISM Services PMI figure and the latest ADP Employment Change numbers.



Gold prices experienced a slight decline on Tuesday due to the rise of Treasury yields. Investors were absorbing remarks made by Federal Reserve Chair Jerome Powell and awaiting the upcoming U.S. jobs data, seeking further indications of potential U.S. interest rate adjustments.

The U.S. central bank still needs more data before cutting interest rates to ensure recent weaker inflation readings give a true picture of what is happening to underlying price pressures, Powell said.

Focus now shifts to Friday's non-farm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates.



On Tuesday, oil prices closed at a lower level after moderating from their two-month peak. This occurred despite the anticipation of heightened demand during the Independence Day holiday and potential supply challenges arising from geopolitical tensions and weather-related disturbances.

Crude’s recent run-up was largely driven by hopes that fuel demand in the U.S. will pick up with the onset of the travel-heavy summer season.

The American Automobile Association forecast that a record number of people will travel by car during the current week, on account of the Independence Day holiday.

Attention will also be on the latest data on U.S. crude stockpiles from the industry body American Petroleum Institute later in the session.


US 500

On Tuesday, the main stock indexes of Wall Street concluded the day with an upturn, driven by the rise in Tesla and the robust performance of megacap growth stocks. However, trading volumes remained low due to the upcoming July Fourth holiday and the eagerly anticipated release of June nonfarm payrolls on Friday.

The U.S. job openings and labor turnover survey showed job openings increased in May after posting outsized declines in the prior two months, but layoffs picked up amid slowing economic activity.

Tesla surged to its highest level since the start of January after the EV maker reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter.

U.S. Federal Reserve Chairman Jerome Powell told a panel that recent economic data represented "significant progress," though he noted that the Fed needed to see more before changing policy.

US 500

The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.

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