US private sector adds more jobs than expected in March
The US ADP Private Sector Employment report showed the addition of 155 thousand jobs in March, beating estimates of a 118 thousand addition, and up from the addition of 84 thousand in January.
The data showcases the flexibility and strength of the labor sector, and will likely reduce the odds of a Fed rate cut in the first half of the year.
US dollar edges down before US jobs data, Trump's tariffs
The US dollar fell in European trade on Wednesday against a basket of major rivals, resuming losses after a two-day hiatus as investors shun big risks before private sector data.
It also comes before Donald Trump’s historic reciprocal tariffs announcement later today, expected to be implemented immediately.
The Index
The dollar index fell 0.1% today to 104.07, with a session-high at 104.31.
On Tuesday, the index rose 0.1%, the second profit in a row, moving away from a week low at 103.75.
US Rates
New York Fed President John Williams said that maintaining interest rates at current levels “for some time” would allow Fed officials to study incoming data and decide on the next steps.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in May stood at 15%.
The odds of such a cut in June stood at a much stronger 75%, with investors now waiting for important US data this week to gather more clues, chief of which the payrolls report on Friday.
US Labor Data
Later today, the ADP Private Sector employment data will be released, expected to show an addition of 118 thousand new jobs in March, compared to the addition of 77 thousand new jobs in February.
Trump’s Tariffs
Trump is scheduled to announce new total and aggressive tariffs later today, aimed at all countries, which would reshape global trade and expand the scope of the trade war.
The tariffs will be applied immediately following Trump’s speech and aimed at any country that imposes tariffs on US products, with Trump calling it “Liberation day”.
Gold resumes gains near historic highs before Trump's new tariffs
Gold prices rose in European trade on Wednesday and resumed their gains after a short hiatus yesterday, approaching fresh record highs as investors await US President Donald Trump’s new tariffs later today.
Investors also await a batch of crucial US labor data this week, which will provide fresh pricing to the odds of a Fed rate cut in the first half of the year.
Prices
Gold prices rose 0.7% today to $3135 an ounce, with a session-low at $3107.
On Tuesday, gold lost 0.3%, the first loss in four days on profit-taking away from a record high at $3149.
Trump’s Tariffs
Trump is scheduled to announce new total and aggressive tariffs later today, aimed at all countries, which would reshape global trade and expand the scope of the trade war.
The tariffs will be applied immediately following Trump’s speech and aimed at any country that imposes tariffs on US products, with Trump calling it “Liberation day”.
US Rates
New York Fed President John Williams said that maintaining interest rates at current levels “for some time” would allow Fed officials to study incoming data and decide on the next steps.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in May stood at 15%.
The odds of such a cut in June stood at a much stronger 75%, with investors now waiting for important US data this week to gather more clues, chief of which the payrolls report on Friday.
SPDR
Gold holdings at the SPDR Gold Trust fell 2.01 tons on Tuesday to a total of 931.37 tons, away from June 2023 highs at 933.38 tons.
Euro declines amid tense atompshere due to Trump's tariffs
Euro fell in European trade on Wednesday on track for the third loss in a row against the US dollar, amid a tense atmosphere before US President Donald Trump’s new reciprocal tariffs later today.
Trump will likely announce strict new tariffs on the EU, threatening economic and trade activities in the eurozone, and targeting vital industries such as cars and industrial products, which represent major portions of EU exports to the US.
The Price
The EUR/USD price fell 0.1% today to $1.0785, with a session-high at $1.0808.
The pair closed down 0.2% on Tuesday, the second loss in a row as eurozone inflation slow down in March.
Trump’s Tariffs
Trump is scheduled to announce new total and aggressive tariffs later today, aimed at all countries, which would reshape global trade and expand the scope of the trade war.
The tariffs will be applied immediately following Trump’s speech and aimed at any country that imposes tariffs on US products, with Trump calling it “Liberation day”.
It’s part of Trump’s America First strategy, which included 25% tariffs on imported steel and aluminum, then 25% tariffs on auto imports.
The tariffs were met with severe criticism from the EU, Canada, China, and other US trade partners, with some planning retaliatory tariffs on US products.
European Commission President Ursula von der Leyen said the EU is open to negotiate with the US on trade, but will respond strongly if needed.
ECB President Christine Lagarde said the prospect of US tariffs represents the start of an independence pathway for Europe.
European Rates
Recent data showed the eurozone inflation rates fell in March, reducing inflationary pressures on ECB policymakers.
Following the data, the odds of an ECB 0.25% rate cut in April fell from 43% to 48%.