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US Private payrolls and Fed Minutes to Guide Markets

The USD is higher against most major pairs as investors are reducing their appetite for risk and flock to safe havens. The JPY is the only of the majors to gain against the dollar on Tuesday’s trading session ahead of the release of the first US employment report of the week and the much awaited minutes from the Fed policy meeting in March.

ADP payrolls report will be published at 8:15 am EDT (12:15 pm GMT). The number of jobs added to employers excluding the government and farming industry is forecasted at 191,000. A slowdown of more than 100,000 form last month’s giant gain of 298,000, but still a healthy trend for US employment.

The US Institute for Supply Management (ISM) will pots its non-manufacturing index at 10:00 am EDT (2:00 pm GMT). The ISM non-manufacturing index is expected to come in slightly slower than last month at 57.1. The US crude inventories will be released at 10:30 am EDT (2:30 pm GMT). Oil prices have climbed in anticipation of a drawdown in US inventories last week.

The minutes from the March Federal Open Market Committee (FOMC) meeting will be published at 2:00 pm EDT (6:00 pm GMT). Analysts and investors will be looking through the notes looking for more insight into the Fed’s balance sheet and their plan to wind it down going forward. The US central bank wants to avoid another ‘taper tantrum’ like in 2013 so it will carefully pick what gets communicated to markets.

The EUR/USD gained 0.101 in the last 24 hours. The single currency is trading at 1.0661 as the USD gained against most major pairs after risk aversion has gripped the market and made some currencies a safer haven than others. The main topic on the global agenda is the meeting between the Chinese President and US President Donald Trump. Trade and currency manipulation could be part of the discussions, although the market expects a more amicable meeting.

European data will be scarce this week offering little support for the EUR. Last week German confidence was steady at 112.3 and this week PMIs were almost unchanged except a drop in Spanish manufacturing being offset by a gain in Italian data. Retail sales in the EU came in higher than the forecast at 0.7 percent but given the political risk due to the upcoming French elections the EUR will continue to be under pressure as investors look for safe havens.

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