• ADP employment prints at 99k, missing expectations

• Odds of 50bps Fed rate cut rise again

• USDJPY declines considerably

The US ADP employment data published today revealed a lower-than-expected rise in private sector jobs; it rose to 99k from a revised 111k previously and is below the forecast of 145k. This reading is the lowest since 2021 and could have major implications for the dollar, the stock market and the Federal Reserve's possible rate decision. Lower ADP data points to a cooling labor market, which could weigh on equities as investors reevaluate the earnings outlook.

The dollar is also under pressure because lower job growth reduces the possibility of aggressive monetary easing by the Fed. Particularly if Friday's nonfarm payroll data also show a slowdown. Market participants are certain about 25bps a rate cut, so most of the speculation is whether the Fed will cut by 50 basis points.  The ADP report for August adds to the story of a weakening economy ahead of the Fed’s policy meeting on September 17-18.

After the release, dollar/yen lost significant ground, recording a new one-month low below the 143.00 level, with the next immediate support coming from the more-than-seven month low of 141.60.