Explore Special Offers & White Papers from ADMIS

Macroeconomics: The Day Ahead for 3 March

Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist

  • Services PMIs accompany Australia Q4 GDP, US ADP Employment, Brazil Q4  GDP on busy day for data; UK Budget, Fed Beige Book and raft of G7 central bank speakers; German 15-yr and Canada 2-yr; Exxon Mobil investor day
  • Services PMIs: Asia mixed, Europe to continue to contract, US expected  to pick up; focus on labour demand and price indices
  • UK Budget: pre-budget leaks implies few surprises, but post delivery trawl through accompanying documents may throw up surprises
  • US ADP Employment: solid gain expected, read across to Payrolls even more tenuous than usual
  • Fed Beige Book: focus on business optimism, supply chain disruptions, prices and labour demand


There is a plentiful run of data and events for markets to ponder today, even if the primary drivers continue to be concerns about valuations / bubbles, and whether central banks will be forced into a volte face on their pledge for ‘lower for a long time’. Statistically there are Australia’s Q4 GDP (much better than expected), Asian Service PMIs, UK BRC Shop Prices and Turkish CPI & PPI to digest, while ahead lie European, UK and US Services PMIs, US ADP Employment and Brazilian Q4 GDP. In theory, the UK Budget should be the highlight of the event schedule, but with so much leaked in advance of the official presentation to Parliament, it will be the post Budget presentation trawl through the proverbial ‘fine print’ which may provide the usual ‘stealth’ surprises. A further swathe of ECB, BoE and Fed speakers accompany the latest Fed Beige Book, while Exxon Mobil’s Investor Day will likely be the highlight in terms of corporate news, while the govt bond auction schedule has 15-yr in Germany and Canadian 2-yr. Brainard’s comments yesterday were largely unsurprising, reiterating the Fed’s current mantras on rates, policy targets and timelines. But she also said she was “paying close attention to market developments, some of those moves and the speed of the moves caught my eye. I would be concerned if I saw disorderly conditions or persistent tightening in financial conditions that could slow progress toward our goals.” On market valuations and bubbles she repeated: “The assessment recently has been that we have seen some signs of stretched valuations but those are not broad at this juncture.”


World – February Services PMIs

Today’s Services PMIs are unlikely to offer any meaningful fresh insights, in so far as sharper activity and movement restrictions are likely to weigh heavily in UK and Europe (though obviously not nearly as severe as in Q2 2020), but with considerably less restrictions in the US, Services are expected to expand at a solid pace. Key points of interest will be price indices which are elevated despite generally subdued levels of activity, and in the US whether the ISM Employment sub-index rebound to pre-pandemic level was a case of frequent volatility in this sub-index, or a signal of better levels of labour demand in the sector, as the US economy opens up.


U.K. – Budget

As noted above, much of what will be announced today has been leaked, with an extension of the furlough scheme (as of end January it was covering 4.7 Mln employees) and self-employed schemes beyond the current end April expiry, as well as the business rates ‘holidays’ for hospitality, leisure and retail. VAT relief and Universal Credit uplift measures are also set to be extended, and a new loan scheme for companies encumbered by the pandemic is also due to be announced. In terms of clawbacks for revenues, a freezing of personal income tax allowances and a step by step rise in corporation tax from the current 19% to 25% is also mooted, as are some measures to boost the attractiveness of IPO listings in London, some further details on funding a national infrastructure bank, and a fund to invest in tech sector start-ups.


U.S.A. – Feb ADP Employment / Beige Book

A solid 200K rise following January’s 174K rise is expected, with surveys point to continued strength in Manufacturing and a pick-up in Services due to easing of lockdown measures. However the divergence with Private Payrolls (Jan +6K) could be even larger this month due to the run of bad weather events, given that the ADP measure counts active employees, whereas the Establishment survey only counts those that have actually been paid. Per se the always tenuous read across from ADP to the official data will be even less valid. In terms of the Beige Book, the key points of focus will business optimism on the outlook and how this is impacting labour demand, and secondly the impact of supply chain disruptions both on output and prices.

To view the full report and to sign up for daily market commentary please email admisi@admisi.com

The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI.

© 2021 ADM Investor Services International Limited.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started