Talking Points:

-January US ADP Employment Change release comes in at 175K vs. 185K estimates

-December figure revised from 238K to 227K

-USD spike followed by moves to the downside

The January figure for the ADP Employment Change print came in at 175K vs. 185K estimates while December’s figure saw a slight downward revision from 238K to 227K. It is important to note that the ADP survey is not necessarily indicative of what we will see at Friday’s Non-Farm Payroll release. For example, last month we saw that the release indicated a 238K positive net change and that beat expectations of 200K for December. Nevertheless, on that following Friday we saw NFPs come in at a dismal 74K.

USD/JPY: February 5, 2014 (5-Minute Chart)

Fresh_Intraday_Lows_for_USDJPY_on_ADP_Employment_Change_body_Picture_1.png, Fresh Intraday Lows for USD/JPY on ADP Employment Change

Source: FXCM Marketscope

As is usually the case, the ADP Employment Change release is good for at least a 20 pip move in USD/JPY. In most cases, we have seen this move retrace within a five minute candle as was the case today. S&P 500 futures are heading lower with USD/JPY ahead of the open and US 10yr yields are pressing fresh intraday lows, currently testing 2.6% at the time of this report. As for event risk for the rest of the day, we have ISM Non-Manf. Composite for January due out at 15:00GMT.

Gregory Marks, DailyFX Research Team

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