USD flows: USD slightly firmer after ADP
German orders marginally firmer but trend softening. JPY reverses initial gains in Asia as equities bounce. GBP a focus as EUR/GBP makes new 2 year high
ADP employment has come in slightly stronger than expected at 42k in October, but the underlying trend still looks quite flat. The USD is generally slightly higher in response, but the data isn’t strong enough to change anyone on the FOMC’s mind about whether to ease in December. The official data, when it comes, from September, October and November will be the key for the December decision. So until the government shutdown ends it will be hard for the USD to generate any real momentum from here. For now, the mildly bid USD tone may persist, with the riskier currencies still looking a little more vulnerable with equities bouncing quite anaemically.
