ADP NFP Quick Analysis: It could be worse, it will be far worse, why the dollar may rise

• ADP's private-sector jobs report has shown a loss of only 27,000 jobs in March.
• The publication captures only part of recent job losses.
• Revisions for March and April's report will likely be devastating.
• The dollar has room to rise on safe-haven flows.

Only 27,000 private-sector jobs were lost in March according to ADP – much better than shedding 150,000 that was on the cards.

ADP is America's leading payroll company, and its labor market figures provide a significant indication towards Friday's official jobs report – the Non-Farm Payrolls. However, the correlation between the two is often missing or only seen after revisions. Moreover, like the NFP, the release does not capture all the layoffs that occurred in the latter half of March. Lockdowns increased and the public mood worsened as the month advanced and as coronavirus spread. 

Revisions for March, due in early May, will likely show a worse picture for the month. And the data for April, with almost all the US under restrictions, will likely be horrendous. 

Markets are relatively quiet in the aftermath of the release, with stock futures on the back foot, yet without change. The US dollar is ahead of its peers, but little changed in comparison to earlier in the day.

The greenback's advance may extend later on. Worsening data – including from jobless claims which may be even higher than last week's 3.283 million – may send investors to the safety of the dollar. The world's reserve currency has already suffered the much-needed correction, a relief move that came in response to vast monetary and fiscal stimulus.

While both the Federal Reserve and the government may do more, that may take time. The risk of a financial crisis has been greatly diminished, but the economic crisis is beginning to unfold. ADP's statistics – showing only a minor loss of jobs – is only the beginning of Covid-19's damage to the world's largest economy and the rest of the world.