Daily Briefing, May 1 – Labour Day, FOMC, ADP & ISM Manufacturing on the Cards
Arslan Butt • 2 min read
Today, the global financial markets had another calm day ahead of what should be a relatively mute day with many of the world’s markets having a day off. On Labour Day, European banks will be closed, which tends to have a substantial impact on liquidity. In an ongoing week, it’s going to be the second most important day before Friday as the US Federal Reserve will be releasing the FOMC statement and interest rate.
Stock markets were confused once again, with Asian markets falling earlier in the day after worse than expected Chinese PMI numbers. While European indices showed some bids after a positive first-quarter GDP release.
Today, investors are expecting earnings reports from more than 50 US companies, triggering the risk-on market sentiment. For sure, it’s not suitable for gold today.
USD – FOMC, ADP and ISM Manufacturing Report
The focus will remain on the ADP Non-Farm Employment Change at 12:15 GMT and FOMC Statement at 18:00 GMT.
Fed Monetary Policy
The US Federal Reserve is widely anticipated to keep interest rates on hold at 2.50%. However, the press conference will leave its marks on the dollar. The Federal Reserve completed its dovish shift in its all-important March meeting by signaling that it will not raise interest rates this year. Although investors aren’t expecting any change in the Fed Fund Rate, volatility can be seen on the news release.
Investors are expecting to hear more of the patient ‘wait and watch’ speech from Jerome Powell and team Fed. But any change in stance could point to some important moves across products, particularly if we see narrow trading ranges ahead of the event. Reporters will likely ask Fed Chair Jerome Powell about the next move in rates, and his answer will garner a lot of attention.
ISM Manufacturing PMI
At 14:00 GMT today, the Institute for Supply Management is due to publish ISM Manufacturing PMI figures. Economists are expecting a slight drop in the PMI figure of 55.0 vs. 55.3.
For newbies, the ISM Manufacturing is a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. It can keep the dollar under pressure today.
ADP Non-Farm Employment Change
The advance nonfarm payroll may have a muted impact today as most of the market is off and rest of the traders are saving their bets for the FOMC and Fed Fund Rate later today during the US session. As per economists forecast, the Advance NFP is expected to report over 180K jobs, which is way higher than 129K new posts published in March. This can keep the dollar supported, but more significant moves are a bit hard to expect today.