📆ADP report for February at 1:15 pm GMT will be final hint ahead of Friday's NFP
Wall Street indices took a hit yesterday after Powell struck a hawkish note during semi-annual hearings before the Senate Banking Committee. Fed Chair hinted that the pace of rate hikes may accelerate back to 50 basis points if economic developments warrant it. Yields and US dollar caught a bid while S&P 500 plunged 1.53% and moved below the 4,000 pts mark. However, an attempt to climb back above this hurdle can be spotted on the S&P 500 futures market today (US500).
Fed Chair Powell is set to appear on Capitol Hill today for the second day of hearings but as text of the speech will remain unchanged from yesterday, this may not be as big of a volatility event as yesterday. However, traders will be offered ADP employment report for February 2023 today at 1:15 pm GMT and it will be a final hint ahead of Friday's NFP report for February. Market expects ADP report to show a jobs gain of 200k, down from +106k signaled by API for January but also significantly below +517k shown by NFP report for January. A point to note is that US CPI report for February will be released on Tuesday next week and those 2 pieces of data (jobs report and inflation data) are likely to be key for the upcoming FOMC decision (March 22, 2023). Currently money markets price in around 40 basis points of tightening for the meeting and strong jobs report compared with still-high inflation could see those move even closer to 50 basis points.
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Open account Try demo Download mobile app Download mobile appTaking a look at S&P 500 futures chart (US500) at the H1 interval, we can see that the index took a big hit yesterday following Powell's hearings at Congress. Drop was halted at the 3,985 pts short-term support zone and an attempt to launch a recovery move can be spotted today. Index made an attempt at breaking above the 4,000 pts resistance zone, marked with previous price reactions as well as 200-hour moving average (purple line), but bulls were unable to break above. While the first attempt failed, index remains nearby and another attempt cannot be ruled out, especially if ADP data comes in softer than expected.
US500 at H1 interval. Source: xStation5
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