Broadway and 26th Street in Manhattan. Image source: "Stay Home if Possible" by edenpictures is licensed under CC BY 2.0
The ADP Non-Farm Employment Change numbers, which are scheduled for release on Wednesday, are going to be the most important economic event this week.
The preliminary employment data represents the final significant insight into the current state of the US labour market before the final Non-Farms Payroll report is released this Friday.
The ADP report takes the spotlight this week due to the massive surge in jobless claims that were reported last week.
The findings of the jobs report are highly anticipated because they are either going to affirm or disprove the fears of economists and traders from last week, regarding the real extent of the COVID-19 fallout on the labour market.
The findings of the ADP report are likely to have a more decisive impact on the markets this week compared to the NFP due to their earlier release. This is typically not the case as the NFP provides a finalised version of the labour survey.
Due to the unprecedented situation, however, the release of the preliminary data is going to be anticipated by many more traders than usual, and it is likely to trigger a much more decided trading action shortly after its publication.
The consensus forecasts estimate a reduction in the total number of employed people by 125 thousand to be recorded for March. The report covers the entire labour market, excluding the farming industry and the government branch.
In comparison, the labour force added 183 thousand new jobs the previous month, which is illustrative of the perceived impact of the coronavirus on the American economy.
US ADP Employment Change. Image source: TradingEconomics.com
If Wednesday's data meets these preliminary projections, this will mark the most significant contraction in the labour force since the 2008 credit crunch.
Such ADP numbers are also likely to support the ongoing global selloff of the US dollar, which began last week following the announcement of the Federal Government’s stimulus package for the reeling US economy.
Meanwhile, the EURUSD pair has rallied for six consecutive days and is currently converging towards the major resistance level at 1.11541, which is also the 61.8 per cent Fibonacci retracement level.
EURUSD 1D Price Chart. Image source: Trendsharks ©, created with TradingView.com
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