Global macro analysis for 03/03/2016:
The ADP Non-Farm Employment Change data were released yesterday as the first of the US jobs market data series and they beat the expectations. Market participants were expecting 185 000 new jobs, a 8 000 more than the previous month, whilst the actual number of jobs created was 214 000. Importantly, strong US employment numbers in the second half of 2015 were a key reason why the US Fed hiked the short-term interest rate in December 2015. At that time, FED hinted that a series of rate hikes were planned for 2016, but softer US numbers this year have lowered expectations. Some economists have predicted that the Fed will hold off from any further hikes until 2017. In conclusion, a solid ADP Non-Farm Payroll report might led to speculation about a March interest rate hike. Moreover, if Friday's official Non-Farm Payrolls beats the estimate of 195 000, we are likely to hear louder speculation about a possible hike again.
Let's now take a look at the technical picture of the US Dollar index. After the bounce from the golden trend line, the price has managed to trade above the 50 and 100 DMA, so bulls are still in control of this market. Moreover, as long as the technical support at the level of 97.21 holds, we can still expect a possible test of the recent resistance at the level of 99.98.