US ADP Non-Farm Employment Change 08/05/09

8:15am (NY Time) US ADP NFP Changes    Forecast -351K     Previous -473K
ACTION: USD/JPY           BUY -280K      SELL -420K

ADP is one of the largest payroll processing providers in the world, and every month it releases its version of Non-Farm Payroll numbers 2 days prior to the official Non-Farm Payroll release.  This release is about 80% accurate to NFP.  But the 20% of the time when it was inaccurate, its figures were totally off.  This is a good news item to watch out for  directional trade, if the numbers comes out at least 70K more or less of the Forecast -351K, then we will look to take a trade with the best looking currency pair.

However, with being said, The last few ADP reports were right on the figure, hopefully we can expect to see more market impact if we get a significant deviation. 

One interesting observation is the current sentiment on USD is very bearish, and usually a better US data will boost risk appetite sentiment and weaken USD further; but ADP and NFP are direct indicators of U.S. job’s market, and it is said that FOMC is using this indicator as their primary reason for possible rate hiking cycle.  So a better than expected number could spark expectation for stronger USD as this fundamental event will change the perception of USD from safe haven currency to a risk appetite currency.  We could see all USD gain across the board while JPY pairs lose across the board.  Look for EUR/JPY, GBP/JPY, or even AUD/JPY for LONG trades in the event of a better number, and Long EUR/USD, GBP/USD, or AUD/USD for a worse number.

[flv:http://www.newsprofiteer.com/080509-usadp/080509-usadp.mp4 480 360]

UPDATE: ADP came out worse than expected but not enough for us to get into a trade.  I saw immediate market risk aversion moves and decided not to get into the market based on this release.  (I am already in a trade at the time).

Related posts:

1. US ADP Non-Farm Payroll Change 09/02/09
2. US ADP Non-Farm Employment Change 11/04/09
3. US Non-Farm Employment Change (NFP) 10/02/09
4. US ADP Non-farm Employment Change 03/31/10
5. US ADP Non-Farm Employment Change 01/06/10
6. US NFP Nonfarm Payroll Employment Change 04/02/10
7. Forex Video & Analysis For U.S. Nonfarm Payroll Employment Change (NFP) 08/06/10
8. US Nonfarm Payroll NFP Employment Change 03/05/2010
9. Forex News Trading US NFP (Nonfarm Payroll) Employment Change 03/04/11
10. Forex Strategy For US NFP (Nonfarm Payroll) Employment Change 08/05/11

Tagged as: ADP, currency, Employment Sector, FOMC, Forex, Forex News, fundamental event, Job's Market, JPY, NFP, Nonfarm Payroll, payroll release, risk appetite, risk aversion, safe haven, trade, U.S., US, USA, USD