ADP U.S. Employment Report Posts Negative Surprise – Direct Market Impact
The ADP private sector employment report was released today, and its results came as a shock to the markets. The U.S. economy recorded a loss of 33,000 jobs in June, compared to expectations of adding 99,000 jobs, with a previous reading of 29,000 — falling well below forecasts. This data reflects a clear slowdown in the U.S. labor market and increases expectations that the Federal Reserve may move toward easing monetary policy in the coming months.
Impact on Both the Euro and the Pound
Despite this negative result, market reaction was contrary to traditional expectations, as both the EUR/USD and GBP/USD pairs dropped significantly immediately after the data release. This move is likely due to the market having already priced in the negative expectations ahead of the report, in addition to profit-taking from earlier long positions, especially after prices approached key resistance levels on lower timeframes.
As for the eurozone, the ADP report coincided with stable inflation data at 2.0%, which supported expectations that the European Central Bank would hold interest rates steady, reducing the overall appeal of the euro. As for the British pound, it faced additional selling pressure due to a technical rejection from key resistance levels, along with continued uncertainty surrounding the Bank of England’s outlook amid recently conflicting data, which caused further volatility in price action.
