The ADP employment report that was published yesterday disappointed economists, revealing a mere 177,000 growth in private sector jobs, falling short of the anticipated 195,000 and dramatically lower than the prior figure of 312,000.

This marks the first time in four months that the ADP numbers have not surpassed expectations, suggesting a slowdown in the labor market consistent with yesterday’s JOLTS data.

Adding to the disappointing U.S. economic indicators, the revised Q2 GDP was lowered to an annualized rate of 2.1%, down from its initial estimate of 2.4%. In Q1, the GDP grew by 2.0%. However, the GDPNow model still projects a robust 5.9% growth for Q3.

Post-release of this data, there was a modest rebound in U.S. indices, with gains hovering around 0.5%. European markets didn’t fare as well; the DE30 index dropped by 0.4%, while the W20 index saw a minor uptick of 0.2%.

In corporate news, tech giant HP saw its stock plunge nearly 8% as it projected a significant decline in PC demand. Conversely, AMC, famous in recent times as a „meme stock,” soared today despite a 75% loss over the past month; today’s gains exceeded 20%. Nvidia also saw a 2.3% rise, pushing its share price close to $500.

In regulatory news, following a spate of bank collapses in Spring 2023, the Federal Reserve is stepping up oversight measures.

It is demanding that regional banks, particularly those with assets between $100 billion and $250 billion, fortify their liquidity models.

According to anonymous sources cited by Bloomberg, these demands cover a broad range of concerns, from capital and liquidity to technology and compliance. However, shares of U.S. regional banks remained stable during today’s trading session, showing no significant volatility.

Major indices evolution

In commodities, gold approached the $1950 per ounce mark, influenced by a further dip in yields. It tested the 61.8% Fibonacci retracement level of its most recent downward move.

Tomorrow promises to be a data-heavy day, featuring significant releases such as the ECB minutes and U.S. jobless claims. However, the most anticipated economic indicator of the week is the U.S. Non-Farm Payroll (NFP) report due on Friday.

In Europe, German inflation for August exceeded expectations slightly, registering a 6.1% year-over-year increase. While this might typically put pressure on the European Central Bank (ECB) to consider a rate hike, the overall gloomy economic forecast might temper such decisions.

Despite this, market sentiment is leaning toward a more than 50% probability of a rate increase by the ECB.

Currency markets reacted to the transatlantic economic updates, propelling the EUR/USD pair above the 1.0900 level. U.S. bond yields, meanwhile, are on a downward trajectory, nearing 3.85% for the 10-year notes.

In the commodities sector, U.S. oil inventories have seen a substantial drop, declining by an impressive 10.5 million barrels per day. This steep inventory decline comes amid rising concerns about near-term oil production due to the ongoing hurricane season. WTI crude oil briefly touched the $82 per barrel mark before retracting by almost $1.

Cryptocurrencies are showing a mixed performance. Despite Grayscale’s recent regulatory victory over the SEC, Bitcoin dropped by 1.6%, hovering around $27,200. The sentiment around altcoins appears even more pessimistic, indicating a challenging climate in the crypto markets.