Focus on ADP employment amid signs of hiring delays

In focus today

In the US, the ADP Weekly Employment figures are published. Last week's release showed private sector payrolls turning negative at -11k per week in the four weeks leading up to 25 October, indicating weakening job growth momentum. Though the data lacks detail, firms appear to have delayed hiring seasonal holiday workers, typically seen in October-November. Such delays could distort seasonal adjustment factors, affecting both weekly and monthly employment data.

In Hungary, the central bank (MNB) is expected to keep the key rate unchanged at 6.50% for the 14th consecutive month. Despite government pressure for monetary easing, as PM Orban trails in most polls ahead of the April elections, Governor Varga has stated the need for a "careful and patient approach to monetary policy". He highlighted the importance of supporting the forint to curb inflation through the exchange rate channel. With inflation still running above the upper end of the tolerance band (4%), it is highly unlikely that we will see any cuts from the MNB anytime soon, which is also reflected in both money market pricing and current consensus forecasts.

Economic and market news

What happened yesterday

Equities: Global equities pulled back yesterday. The S&P 500 fell 0.9%, with communication services and utilities being the only sectors in the green - signalling a defensive rotation. Dow Jones was down -1.2% while Stoxx 600 declined 0.5%. Notably, this happened without any new economic data on the health of the US economy or the labour market across major markets, despite some central bank officials being more concerned about the labour market or put in the words of Fed's Waller, the labour market is nearing "stall speed". Key events to watch this week is tomorrow's NVIDIA earnings report and Thursday's job data thus limited risk sentiment ahead of the releases.

FI and FX: EUR/USD edged marginally lower yesterday but continues to hover around 1.16. Scandies remain in synch, with EUR/NOK back above 11.70 after a brief visit below and EUR/SEK centred around 11.00. EUR/JPY briefly touched on 180 for a new all-time high, whilst USD/JPY edged above 155 for a 10-month high. The US treasury curve bull flattened modestly whereas Bunds bull steepened slightly. Equities in deep red over the night as risk sentiment has taken a hit.