ADP data and revisions cause USD to gyrate

USDJPY, H1                    

The 178k July ADP rise undershot our 185k private payroll estimate with a 190k total payroll increase, following a big 33k boost in the June rise to 191k from 158k that reversed the gap to the 187k private payroll rise in that month. We saw a lean 4k July goods employment rise despite still-firm factory sentiment readings, with gains of 6k for construction and 3k for mining but a 4k drop for factories, alongside a largely expected 174k service job gain. The “as reported” ADP figures have overshot private payrolls in every month since the October methodology change except April and June, and perhaps now in August, to leave an average overshoot of a hefty 47k and an average monthly 2017 gain of 217k. We saw undershoots of 29k in June and 17k in April, though with a 94k interim overshoot in May, and prior overshoots of 204k in March, 76k in February, 42k in January, 3k in December, 38k in November, and 15k in October. The ADP as-reported average absolute error since the 2016 methodology change is 58k, versus a 35k average absolute error for the survey median.

The dollar gyrated slightly lower, then higher after the ADP jobs report miss, and upwardly revised June outcome, ending up about unchanged once the dust had settled. EURUSD moved between 1.1820-35, while USDJPY gyrated inside of 110.65-89. The USDJPY has strong resistance at 111.00 (H1 200 period moving average) following yesterday’s collapse under 110.00.

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Stuart Cowell

Senior Market Analyst


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