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Will bad data continue to be good data?
Markets eye ADP non-farm employment change data
Concerns about global demand and growth, spurred by weak ISM manufacturing data and disappointing JOLTS job figures, failed to halt the U.S. dollar's rebound from two-month lows.
The dollar steadied near 104.20 after dipping below this level earlier in the week; JOLTS job report hit its lowest since 2021, increasing the odds of interest rate cuts.
EUR/USD slipped 0.1% to 1.0873, even with eurozone business activity reaching its fastest growth rate in a year, with HCOB's PMI at 52.2.
In currencies
Mounting worries about global demand and economic growth were exacerbated by weak ISM manufacturing data on Monday and disappointing Jolts job figures yesterday, still the U.S. dollar strengthened this morning, rebounding from two-month lows as investors awaited further indications on future monetary policy.
The dollar steadied near 104.20 following a dip below this level earlier this week.
US JOLTS Jobs report dropped to its lowest level since 2021, raising the odds of interest rate cuts, a prime example of when bad data becomes good data.
The EUR/USD slipped 0.1% to 1.0873, despite data indicating that eurozone business activity grew at its fastest pace in a year in May. The HCOB's eurozone composite Purchasing Managers' Index climbed to 52.2 in May from 51.7 in April, marking its highest level since May 2023.
The GBP/USD also edged up to 1.2771, following the U.K. May composite PMI, which dropped 53.0. From April's 54.1. The Bank of England is set to hold a potentially crucial policy meeting later this month, with traders closely monitoring for indications on the commencement of its rate-cutting cycle.
In Commodities
Oil prices continued their recent decline following the OPEC+ policy decision over the weekend. WTI hovered close to $72.96 while Brent was steady around the $77 handle well below its recent sideway trend ranging from $80 to $87.
Meanwhile gold prices continued trading in a tight range near $2,332 ahead of ADP non-farm employment change which are expected to nudge lower to 173K from 192K previous.
