Investors anticipate labor market data from ADP - 3.3.2021

On Tuesday, the US dollar index updated its 3-week high but then edged down. At first, investors responded positively to Fed's statements that the rise in the US government bonds yields poses no threat. At the same time, the increase in inflation may be caused by the accelerated GDP growth. Later, the dollar index began correcting against the backdrop of a short-term fall in the 10-year Treasury notes yield below 1.4% per annum. No significant macroeconomic data were released in the US yesterday. The euro rose despite the negative data on retail sales in Germany in February (-8.7%). Investors have also ignored ECB head Christine Lagarde’s statement that the European regulator will fight against rising interest rates on loans to businesses and EU citizens. This could be a sign of a future increase in the money supply. The Australian dollar was up slightly on strong Q4 GDP data (+3.1% QoQ). This was offset by a negative statement of the Reserve Bank of Australia that the rate (+0.1%) could remain at a low level for long (until 2024).

On Tuesday, the US stock markets faded. The announcement by the Fed representatives that they will not yet hinder the growth of Treasury notes yields supports the US dollar rate, but negatively affects the stock indices. In addition, some investors are negative about the delay in the United States Senate’s approval of the $1.9 trillion stimulus package. ADP Employment Change for February will be published in the US today. It will help to forecast Non-Farm Payrolls, which will be released on Friday. In addition, the US non-manufacturing PMIs from Markit and ISM and the Fed Beige Book will be published today. All forecasts are neutral. The regional Fed representatives will also speak today.

World oil prices dropped on Tuesday for the 4th day in a row. The independent API reported an unexpected increase in US oil reserves, for the second time in a row, by 7.36 million barrels over the week. Official data on stocks will be released today. Oil quotes are now slightly higher ahead of tomorrow's OPEC+ decision regarding an increase in production in April.