The United States ADP Nonfarm Employment Change is out today - 8.3.2023

The US dollar index saw a significant increase on Tuesday and continued to rise this morning, reaching a 3-month high. This positive response was due to US Federal Reserve (Fed) Chair Jerome Powell's indication that interest rates could increase beyond previous expectations. The probability of a 0.5% rate increase at the Fed's upcoming meeting on March 22 has risen to 72.7%, which is a significant increase from the previous month. The Fed's monetary policy is heavily influenced by inflation and the labor market, and the release of the official review of the US labor market for February (Nonfarm Payrolls) on March 10 could impact the dynamics of the US dollar. Yesterday, the Reserve Bank of Australia increased its rate by 0.25%, causing AUDUSD to drop. The Bank of Canada's meeting will take place today, and it's possible that the rate will remain at 4.5%.

Meanwhile, Bitcoin quotes continue to decline and are approaching the lower limit of the $21,000-25,000 range, with players waiting for new market movements.

US stock indexes experienced a decline yesterday due to the tightening of the Federal Reserve's monetary policy and the expected increase in interest rates, which typically have a negative impact on stock prices. The yield on 2-year US Treasury has risen above 5% per annum, causing bonds to also decrease in price. The decline in financial institution assets led to a drop in the NASDAQ Bank sectoral index by 3% on Tuesday, while the NASDAQ Internet index experienced a smaller decline of 0.6%. Despite announcing plans for staff cuts, shares of Meta Platforms fell only by 0.2%, as investors anticipate that this will help to reduce the company's costs. In addition to the ADP labor market report, the United States Trade Balance and the Fed Beige Book economic review will also be published today.

On Tuesday, oil quotes fell sharply. The main reason for this was the strengthening of the US dollar. An additional negative was the decline in oil imports in China by 1.3% y/y in February this year. The market was supported by data from the American Petroleum Institute that US oil inventories decreased by 3.83 million barrels over the week.

Natural gas in Europe on the ICE Dutch TTF once again made a new low and is now trading at about $480 per 1000 cubic meters. US gas quotes on the Henry Hub fell slightly to $2.72 mmBtu. They are supported by the export of liquefied natural gas (LNG) from the United States.