USD flows: USD little changed after ADP
ADP broadly in line with consensus. USD better bid after early European losses but underlying tone remains weak as long as risk sentiment remains positive.
The April ADP employment data was broadly in line with consensus at 109k, and is unlikely to change anyone’s view of the official US employment data due on Friday. After weakening through most of the European morning, the USD had already recovered most of the lost ground before the ADP data, but the strong equity market performance still suggests the USD will remain under pressure against the riskier currencies, while the JPY continues to be supported by the intervention threat. There is of course still plenty of risk that the current positive take on the prospects for a US/Iran deal reverses, and the pricing of equities continues to look overoptimistic from a longer term perspective. But for now a mild risk positive and USD negative bias seems likely to persist.