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The has taken back some of its losses today following the release of the ADP Employment Change report for September. Despite a relatively low reading at +135K, the September labor figures are heavily distorted by the collective impact of the hurricanes last month. In reality, the forthcoming jobs data won't necessarily reveal anything pertinent about the underlying state of the US labor market. Overall, the US Dollar's rally has been spurned by the dip in US Treasury yields, as the economic calendar has been rather quiet thus far this week.
: Wednesday, October 4, 2017 - North American Data Releases
Data remaining on the North American calendar today carries high importance for the US Dollar, particularly in shaping expectations for Friday's September US Nonfarm Payrolls report. The ISM Non-Manufacturing/Services report will make up the second leg of key information needed to formulate an estimate for Friday's jobs data. Using a rolling 10-year simple linear regression model, the ADP report and the ISM Services report can account for 89% of the variation in the headline NFP figure (R^2 = 0.89).
: Wednesday, October 4, 2017
IG Client Sentiment Index Chart of the Day:
USDJPY: Retail trader data shows 49.7% of traders are net-long with the ratio of traders short to long at 1.01 to 1. The number of traders net-long is 6.0% lower than yesterday and 7.1% lower from last week, while the number of traders net-short is 3.9% higher than yesterday and 13.6% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDJPY prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDJPY-bullish contrarian trading bias.
Five Things Traders are Reading
by Paul Robinson, Market Analyst by Christopher Vecchio, CFA, Senior Currency Strategist by Paul Robinson, Market Analyst by David Song, Currency Analyst by Martin Essex, MSTA, Analyst and Editor The DailyFX US AM Digest is published every day before the US cash equity open - you can to receive this report in your inbox every day.
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