Economic Events Outlook, July 5: US ADP and FOMC Ready to Play

Posted Thursday, July 5, 2018 by
Arslan Butt • 2 min read

We’re in the middle of the week and so far the market has remained muted due to the US Independence Day holiday. Most of the events such as EIA crude oil report and advance NFP which were supposed to release on Wednesday will be released today due to the national holiday. Most importantly, we have also got FOMC Meeting Minutes on the docket for today. So, it’s going to be a very busy day and we may have nice forex trading signals for trading. 

Watchlist – Top Economic Events Today

USD – ADP Nonfarm Employment Change

The Automatic Data Processing, Inc. will be releasing the ADP Nonfarm Employment Change at 12:15 (GMT). It is an estimated change in the number of employed people during the previous month, excluding the farming industry and government. Interestingly, this figure is also called an advance NFP as the figure is released two days before the actual Nonfarm payroll and both these figures share positive correlations.

In May, the ADP reported a relatively low level of job gains of 178K, which remained within the normal ranges for the past few years. Economists have expected a slightly stronger growth of 190K this month. Any significant divergence will not only move the dollar but will also shape expectations for Friday’s Non-Farm Payrolls report.

USD – ISM Non-Manufacturing PMI

It’s a survey of about 400 purchasing managers which asks respondents to evaluate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. The figure above 50 indicates optimization and is considered good for currency.

The Institute for Supply Management (ISM) is scheduled to release the data at 14:00 (GMT) with a forecast of 58.3 which is slightly below last month’s number of 58.6.

USD – FOMC Meeting Minutes

At 18:00 (GMT), the Fed (Federal Reserve) will release the minutes from the June policy meeting which hiked the interest rates from 1.75% to 2%. In addition to inflating interest rates, the Fed was bullish on the economy and indicated further two interest rate hikes this year.

I will be looking to see what Fed Chair Jerome Powell has to say about the ongoing trade war tensions. As you know, the U.S. Chamber of Commerce commented that this trade war can also hurt the U.S. economy.  

USD – Crude Oil Inventories

It’s one of the most important events to trade the crude oil & Canadian currency, especially when there’s so much going on in OPEC regarding output. At the same time, Trump is warning OPEC to lower the prices. We will speak about it in more detail in our next update but for now, we recommend that you follow EIA inventories report at 15:00 (GMT). All the best!

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