ADP Employment Report Small Increase
STOCK INDEX FUTURES
Stock index futures are higher.
The September Automated Data Processing, Inc. employment report showed an increase of only 89,000 when up 150,000 was expected.
The 8:45 central time September PMI composite is anticipated to be 50.1.
The 9:00 August factory orders report is predicted to show a 0.2% increase and the 9:00 September Institute for Supply Management services index is estimated to be 53.5.
The U.S. dollar came off its highs yesterday when it was reported that the Bank of Japan may have intervened in foreign exchange markets to support the yen by selling U.S. dollars and buying yen.
Japan’s Finance Minister Shunichi Suzuki recently warned that he was watching currency moves “cautiously.” Last year, Japanese monetary authorities intervened in the currency markets for the first time since 1998 when the yen declined against the U.S. dollar.
There was follow-through weakness for the greenback today when the smaller than expected increase in the ADP employment report was released.
Producer prices in the euro area declined by 11.5% year-on-year in August 2023, following a 7.6% decrease in the previous month. This was broadly in line with market expectations of an 11.6% drop and was the steepest decline in producer prices on record.
The final reading of the S&P Global U.K. Services Purchasing Managers’ Index fell in September to 49.3 from 49.5 in August, falling further under the 50 threshold for growth.
INTEREST RATE MARKET FUTURES
Futures are higher, supported by the weak ADP employment report.
Financial futures markets are predicting there is a 78% probability that the Federal Open Market Committee will keep its fed funds rate unchanged and a 22% probability of a 25 basis point increase at its November 1 policy meeting.
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