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Economic Events Outlook, Jan 3 – Flash-Crash Hits the Forex Markets

Posted Thursday, January 3, 2019 by
Arslan Butt • 2 min read

Wow, what a day it is. There’s hardly any major fundamental to describe what just happened in the forex market today.

The Aussie experienced some of the biggest intra-day slumps in its history, falling 5% against Yen and almost 4% against the US dollar.

The safe haven Yen jumped almost 8% against the Australian dollar to its strongest since 2009.

Well as of now, there’s no solid reason that can define what caused the violent crash in the market. Some point to risk aversion which was triggered after Apple cut its sales outlook. While others said Japanese retail investors were behind the trades. Well, whatever the reason was, it was completely unexpected and caused traders some huge losses.

Speaking of the fundamentals today, the market is all about the US Dollar. During the New York session, the market is likely to remain highly volatile as the economic calendar is set to release some hot events. The ADP Non-farm payroll and ISM Non-Manufacturing from the United States top the list. Let’s see how to make this work for us.

Top Events To Watch Out Today

US Dollar – USD

ADP Non-Farm Employment Change
The highlight on the US economic calendar will most probably be the employment report for December, due out on Friday. But the ADP also has its role to play. The advance NFP is due at 13:15 (GMT).

What’s ADP Nonfarm Employment Change?
It’s an estimated change in the number of employed people during the previous month, excluding the farming industry and government. In November, ADP reported slower growth in the labor market as the US economy added only around 179K jobs, hiking concerns about upcoming rate hikes in 2019.

A neutral forecast will be weighing on the dollar until the release of the news. However, any major change in the ADP figures will be helpful for investors to determine the actual Nonfarm Payroll data which is due this Friday.

ISM Non-Manufacturing PMI
At 15:00 (GMT), the Institute for Supply Management will release Services PMI figures. A day before, the Final Manufacturing PMI figures failed to surprise the market but still, the number was above the minimum threshold of 50, signaling expansion in the US economy.

Today, better than expected non-manufacturing PMI data is likely to increase the chances of a positive NFP. In November, the figures scored a high of 59.3 vs. 57.5 forecast. A slight drop to 57.7 is expected in December.

Great Britain Pound – GDP

Construction PMI
The British Pound can stay under pressure today as the UK’s construction PMI is forecast to drop to 57.9 vs. 60.7. For beginners, the Construction PMI is a survey of about 170 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The market will be highly influenced by the US ADP figures today.

Good luck for today and have a profitable day!

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