Notorious ADP Miss into VJ Day

Notorious:
In the lead up to tomorrow’s all important NFP number, last night saw the ADP Non-Farm Employment Change come in below expectation at 190K v the 204K expected. The July revision was also to the downside from 185k to now 177k.

CEO of ADP, Carlos Rodriguez:

“The job growth numbers for August improved slightly from July.”

“The employment gains for the month are in line with the year to date average.”

We’re now down to a 30% chance that the Fed makes their first move in September (this month now!). With last night’s ADP number as well as second tier Factory Orders missing the mark, it would be easier for the Fed to justify waiting if NFP does miss tomorrow. I get the feeling that the run of good numbers we’ve seen running into the month could be easily put on the back-burner if the most recent disappoints.

Last night also saw ‘bond guru’ Bill Gross labeling any move that the Fed now makes within the current market turmoil as “too little too late”.

From an investment outlook Wednesday for Denver-based Janus Capital Group:

“The ‘too late’ refers to the fact that they may have missed their window of opportunity in early 2015, and the ‘too little’ speaks to my concept of a new neutral policy rate which should be closer to 2% nominal, but now cannot be approached without spooking markets.”

Listening to someone like Bill Gross is questionable, but the headlines love him so we have to take notice.

Australian GDP also came in at 0.2% v the 0.4% expected in a miss that was expected after the Trade Balance data we saw on Tuesday.

AUD/USD Hourly:

The Aussie dollar briefly poked its head through the psychologically important 70c level on the poor GDP number, but the break wasn’t sustained.

Just remember that the weekly support level that we have been watching hasn’t been cleanly broken and now we’ve tested 0.7000, we could easily ping straight back up from here.

On the Calendar Thursday:
CNY Bank Holiday
AUD Retail Sales m/m
AUD Trade Balance

GBP Services PMI
EUR Minimum Bid Rate
EUR ECB Press Conference

CAD Trade Balance
USD Trade Balance
USD Unemployment Claims
USD ISM Non-Manufacturing PMI

Chart of the Day:

“Victory over Japan Day is the day on which Japan surrendered in World War II, in effect ending the war.”

HSI Weekly:

Well China picked a good day to go on holiday. Boy is that one ugly looking chart!

After the solid Hang Seng bullish channel dating back to 2008, the party looks to have finally come to an end, with an ugly breakout and close below support.