USDJPY TECHS: Maintains A Bearish Tone

Dovish readthrough for Fed pricing on the back of the softer-than-expected ADP print means that Fed funds futures once again fully discount 3x 25bp cuts through year-end, with ~80bp of easing now priced through the Dec FOMC vs. ~73bp ahead of the data.

• A reminder that as little as ~37bp of cuts were priced over the same horizon as recently as mid-February.
• ~14.5bp of cuts priced through May vs. ~12bp ahead of the data, with ~32.5bp of cuts showing through June vs. ~28.5bp ahead of the data.
• The miss in the headline ADP figure, coupled with mostly negative revisions to recent months, will do little to placate deepening growth concerns that have driven much of the dovish repricing seen in recent weeks.
• Indeed, the ADP release noted that the survey “suggests a hiring hesitancy among employers as they assess the economic climate ahead”.
• However, we have also noted the wide differences between the survey and private payrolls figures in recent months.
• The employment component of the impending ISM services survey presents the next labour market indicator worth watching.

• -5,000 FFK5 95.785 (+0.015), post time bid at 0903:01ET

• Bund and wider Govies are recovering from their previous lows, the German Syndication is out of the way and the US ADP miss has been helping.
• The US Emini also hovers at the low on the back of the Data.
• Desks will now be Watching the US Cash Equity open in 30 minutes, followed by Factory orders, but more importantly the ISM Services and it components.
• The US services PMIs and Durable Goods will be final reading Today.