US open: Futures pare gains on disappointing ADP data

Disappointing ADP data overshadows vaccine and reopening optimism.

Charts (3)

US futures

Dow futures +0.1% at 31397

S&P futures -0.1% at 3865

Nasdaq futures +0.1% at 13085

In Europe

FTSE +0.4% at 6638

Dax +0.2% at 14076

Euro Stoxx +0.1% at 3713

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US economy to reopen earlier on vaccine drive

News announced by President Joe Biden that the US will have enough vaccine doses for all American adults by May is lifting is lifting risk appetite. A deal between Johnson & Johnson and Merck has been agreed and this will substantially expand J&J’s covid vaccine manufacturing capacity.

All American adults could now be vaccinated two months earlier than the initially planned for July date. Consequently, the US economy will be able to reopen sooner than initially expected.

In another sign of the improving picture in the US, Texas has ended covid restrictions on businesses as the infection rate dropped substantially.

US Private Payroll’s disappoint

The ADP private payroll report revealed that companies added fewer than expected payrolls in February. Private payrolls rose by 117K versus 177k expected and down from the upwardly revised 195k in January. This steep miss highlights the ongoing struggles that businesses are facing amid the pandemic and doesn’t bode well for Friday’s non-farm payroll report and has sent futures lower ahead of the open.

Australia Q4 GDP beats forecasts

Australian reported a better than expected 3.1% GDP growth in Q4, well ahead of the 2.5% expected as consumer spending and iron ore prices surged. The upbeat data comes despite an ongoing and widening dispute with China its largest trading partner.

Consumer spending surged 4.3%quarter on quarter as households splashed the cash that they had saved across lockdown quarters.

A similar phenomenon is expected in other countries when covid restrictions are lifted.

Stocks to open higher

The upbeat outlook for the economy has seen demand for riskier assets such as stocks rise. US futures point to a stronger start.

As earning season winds down there are reports due from Marvell, Dollar Tree.


Lyft trades +4.5% ore-market after the ride hailing company raised its outlook amid a quick than expected return of demand. The week ending 28th Feb was the company’s best week since March last year.

FX – GBP flat mid Budget

GBP is trading flat after the Chancellor announced the extension of the furlough scheme until September but also announced plans to raise corporation tax to 25% from its current 19% in 2023 with an exemption for smaller businesses. The OBR forecasts showed that the UK economy would bounce back quicker than forecast.

Analyst Fiona Cincotta looks at EUR/GBP price action and levels to watch here.

GBP/USD trades +0.04% at 1.3958

EUR/USD trades -0.3% at 1.2050

Oil resumes uptrend

After a steep drop at the start of the week oil prices have jumped back over $60 ahead of tomorrow’s OPEC meeting. Reports that several OPEC+ members are in favour of keeping output levels unchanged boosted the price.

Oil had sold off steeply at the start of the week on expectations that production cuts would be eased and more oil released back into the markets.

The market has broadly shrugged off US API stock pile data which showed a surprise rise in US crude inventories.

US crude trades +1.15% at $60.20

Brent trades +1.02% at $63.70

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