US: ADP employment puts the focus on jobs data - BBH

Research Team at BBH, suggests that the USD tone is consolidative as the market awaits assurances that the jobs growth this month has been sufficiently strong as to keep the prospects of a September meeting still alive. 

Key Quotes

“That said, before the weekend, the September Fed funds futures implied a 42% chance of a hike, whereas by the close yesterday, the odds had been scaled back to 34%.  And still, the dollar remained firm. 

The ADP employment estimate is kicked off the focus on US jobs.   The median forecast from the Bloomberg survey is 175k, essentially unchanged from 179k in July.  Our caveat is straight forward.  The June and July jobs growth was well above recent and long-term averages.  A mean-reversion process warns of the risk of the softer number.  Moreover, the recent pattern, that is for the past five years, the actual August report has been below median expectations.”