U.S. ADP Nonfarm Employment Change Falls Short of Expectations

Economic

Forex

Summary:

The latest report on the ADP Nonfarm Employment Change was released today, revealing a significant shortfall in the number of jobs...

The latest report on the ADP Nonfarm Employment Change was released today, revealing a significant shortfall in the number of jobs created in the non-farm private sector. The actual figure came in at 62,000, a number considerably lower than the predicted 114,000.

This unexpected drop in job creation is a stark contrast to the forecasted figure. Economists had projected an increase of 114,000, indicating a healthy growth in the private sector. However, the actual data fell short by 52,000 jobs, painting a less rosy picture of the U.S. employment landscape.

Comparatively, this month’s data also shows a notable dip when compared to the previous month. The previous ADP Nonfarm Employment Change report had recorded a healthier 147,000 job additions. This means that compared to the previous month, the number of jobs created in the non-farm private sector has decreased by 85,000.

The ADP National Employment Report is a significant indicator of the health of the U.S. economy, providing an early snapshot of the country’s employment situation two days ahead of government data. Based on the payroll data of approximately 400,000 U.S. business clients, it measures the monthly change in non-farm, private employment.

The lower than expected reading is likely to be interpreted as bearish for the U.S. Dollar (USD), as it indicates a slowdown in job creation in the non-farm private sector. This could potentially influence the Federal Reserve’s decision-making regarding interest rates and monetary policy.

While it’s important to note that this indicator can be very volatile, the significant shortfall in job creation is a potential cause for concern. It underscores the challenges facing the U.S. economy in its efforts to recover and grow, and it may signal the need for more robust measures to stimulate job growth.

Source: Investing

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Warren Takunda

Commodity

Oil prices extended declines on Wednesday and were set for their largest monthly drop in almost three and a half years as the global trade war eroded the outlook for fuel demand, while concerns over mounting supply also weighed.

Retracing some earlier losses, Brent crude futures were down 63 cents, or 1%, at $63.62 per barrel by 1159 GMT. U.S. West Texas Intermediate crude futures dropped 42 cents, or 0.7%, to $60.00 a barrel.

So far this month, Brent and WTI have lost around 15% and 16%, respectively, the biggest percentage drops since November 2021.

Both benchmarks slumped after U.S. President Donald Trump's April 2 announcement of tariffs on all U.S. imports. They then sank further to four-year lows as China responded with levies, stoking a trade war between the top two oil-consuming nations.

Trump's tariffs have made it probable the global economy will slip into recession this year, according to a Reuters poll.

China's factory activity contracted at the fastest pace in 16 months in April, a factory survey showed on Wednesday.

U.S. consumer confidence slumped to a nearly five-year low in April on growing concerns over tariffs, data showed on Tuesday.

While orders Trump signed on Tuesday to soften the blow of auto tariffs eased some jitters among investors, oil prices were also undermined by concerns over mounting supply from OPEC+.

Several OPEC+ members will suggest a ramp-up of output hikes for a second straight month in June, sources told Reuters last week. The group will meet on May 5 to discuss output plans.

"The very real possibility that OPEC+ will continue to bring extra barrels to the market as it fights to keep order within its ranks is added to the diplomatic thrusts in Ukraine and Iran, which if successful means more international crude on the water at a time when a trade war will squash any hope of demand growth," said PVM analysts.

Also sending bearish signals on the supply side, U.S. crude oil inventories rose by 3.8 million barrels last week, market sources said on Tuesday citing American Petroleum Institute data.

U.S. government data is due at 10:30 a.m. ET (1430 GMT). Analysts polled by Reuters expect, on average, a 400,000 barrel increase in U.S. crude oil stocks.

Source: Reuters

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Glendon

Political

Ukraine is ready to sign a natural resources deal with the US, a person familiar with the matter said, in a move that could bolster Washington’s support for Kyiv by strengthening their economic partnership.

The draft agreement, which envisages creating a joint fund to manage Ukraine’s investment projects, has been finalised and may be signed as soon as Wednesday, the person said, speaking on condition of anonymity because the talks are private. Ukrainian Economy Minister Yulia Svyrydenko is on her way to Washington for the signing, they said.

As part of the agreement, the US and Ukraine will seek to create the conditions to “increase investment in mining, energy, and related technology in Ukraine,” according to the draft of the document seen by Bloomberg News. Washington also acknowledges Kyiv’s intentions for the deal to avoid any conflict with its plans to join the European Union — long seen as a red line for Ukraine in the talks.

In another breakthrough, the US has agreed that only future military assistance it may provide to Ukraine following the signing of the deal would count toward its contribution to the fund, according to the document. Ukrainian Prime Minister Denys Shmyhal said Sunday that Washington had dropped its insistence on the inclusion in the deal of the tens of billions of dollars in aid delivered since the start of Russia’s invasion.

The signing could come as President Donald Trump grows increasingly frustrated over delays in clinching a ceasefire in the war, currently in its fourth year. He has questioned whether Russian President Vladimir Putin is willing to make progress toward a peace plan that Trump sought to deliver within the first 100 days of his new administration. Trump is “confident” a deal on critical minerals will be signed with Ukraine, the White House said on Tuesday.

The agreement “strengthens the strategic partnership between the parties for the long-term reconstruction and modernisation of Ukraine, in response to the large-scale destruction caused by Russia’s full-scale invasion”, according to the document.

Two other technical accords that will determine how the joint fund is going to operate have yet to be finalised, the person said.

The US Treasury Department spokesperson didn’t immediately respond to a request for a comment.

US and Ukrainian officials signed a memorandum of intent earlier in April and continued to hash out the technical details of the deal, which would grant the US first claim on profits transferred into a special reconstruction investment fund that would be controlled by Washington.

A previous attempt to clinch the agreement fell through earlier this year after Ukrainian President Volodymyr Zelenskiy clashed with Trump and Vice President JD Vance in the Oval Office. Zelenskiy met one-on-one with the US president at the Vatican on Saturday before the funeral of Pope Francis.

Russia intensified its attacks across Ukraine’s frontline and several cities overnight, as the Kremlin takes a maximalist line in peace negotiations brokered by the US. While Trump envoy Steve Witkoff sought to persuade Putin that Russia should agree to a ceasefire that halts fighting along the current frontlines, the Russian leader insisted Moscow must take full control of four regions of Ukraine which it claims but doesn’t fully occupy, Bloomberg News reported.

White House Press Secretary Karoline Leavitt reiterated on Tuesday that Trump was getting frustrated with the difficulty of getting both Ukraine and Russia to agree to a peace deal, but that “he remains optimistic that we can get this done”.

Source: Theedgemarkets

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Michelle

Political

An attack targeting Hindu tourists in Indian Kashmir that killed 26 men has triggered new tensions between India and Pakistan and sparked fears of a conflict, with Pakistan saying it has intelligence suggesting India intends to launch military action.

Here is a look at the defence forces and arsenals of the nuclear-armed South Asian neighbours, according to data from the London-based International Institute for Strategic Studies.

PERSONNEL

India has 1.4 million active personnel in its defence forces - 1,237,000 in the army, 75,500 in the navy, 149,900 in the air force, and 13,350 in the coast guard.

Pakistan's strength is thinner, with under 700,000 personnel, of whom 560,000 are in the army, 70,000 in the air force, and 30,000 in the navy.

GROUND FORCE

India's arsenal includes 9,743 pieces of artillery against Pakistan's 4,619 pieces, and 3,740 main battle tanks compared to Pakistan's 2,537.

AIR FORCE

While India has 730 combat-capable aircraft, Pakistan's fleet is much smaller at 452 aircraft.

NAVY

India's navy has 16 submarines, 11 destroyers, 16 frigates, and two aircraft carriers, while Pakistan's navy has eight submarines and 10 frigates.

NUCLEAR ARSENAL

India has 172 warheads and Pakistan boasts of almost an equal number, with 170.

Graphic: Graphics showing the military power of India and Pakistan

Source: Reuters

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Gerik

Economic

Germany Posts Modest Q1 Growth Amid Lingering Economic Stagnation and Trade Risks

Germany’s economy expanded by 0.2% in the first quarter of 2025, matching economist expectations and narrowly avoiding further contraction. The figure, released by the German federal statistics office, marked a fragile rebound from a 0.2% decline in the final quarter of 2024. While the data points to some underlying stability, the pace of expansion remains insufficient to suggest a sustained recovery for Europe’s largest economy.

Stagnation Lingers Despite Rebound in Consumption and Investment

The GDP increase was attributed to higher household consumption and capital formation. However, as Carsten Brzeski, global head of macro at ING, emphasized, the result is “still far too small to end the country’s long-lasting stagnation.” Germany’s economic growth has been erratic for the past two years, with the economy alternating between marginal growth and contraction each quarter—a reflection of deep-seated structural weaknesses and geopolitical headwinds.

Key industries such as automotive manufacturing continue to face fierce competition from Chinese rivals, while construction and infrastructure have been held back by rising input costs and bureaucratic red tape. Compounding these issues, a wave of protectionist trade policy under U.S. President Donald Trump has begun to significantly impact Germany’s export-heavy economy.

Tariff Uncertainty Overshadows Short-Term Outlook

Germany, as part of the European Union, is now subject to blanket 20% tariffs on exports to the U.S., although this figure has been temporarily lowered to 10% during ongoing negotiations. Sector-specific duties on steel, aluminum, and autos remain in place, adding additional pressure on Germany’s industrial base. As the U.S. is Germany’s largest export market, this policy shift introduces heightened uncertainty and threatens to suppress demand for German goods abroad.

Last week, the German government revised its 2025 economic forecast to predict stagnation, citing Trump’s tariff campaign as the primary driver of reduced expectations. Outgoing economy minister Robert Habeck described the trade policy environment as the most significant risk to Germany’s near-term outlook.

Fiscal Stimulus Offers Long-Term Hope, But Implementation Is Key

There may be a silver lining. Germany has adjusted its “debt brake” fiscal rule to allow for a new €500 billion investment fund targeting defense, infrastructure, and climate transition. This strategic shift has been broadly welcomed by economists as a much-needed injection of public capital into an otherwise flatlining economy. However, the effectiveness of the stimulus depends heavily on timely implementation and targeted allocation.

According to ING’s Brzeski, the Q1 GDP print “paints a picture of what could have happened if it hadn’t been for US President Donald Trump’s tariff blast.” He suggested that without the trade shock, Germany might have entered a cyclical upturn aided by the announced stimulus. However, tariffs and geopolitical realignment have delayed this path, increasing the likelihood of an extended recovery timeline.

Inflation in Check, Giving ECB Room to Maneuver

Meanwhile, inflation in Germany continues to ease. The harmonized consumer price index stood at 2.3% in March, down from 2.6% in February and approaching the European Central Bank’s 2% target. Preliminary figures for April are expected to show a further decline to 2.1%. With inflation in retreat and economic momentum limited, the ECB has already begun cutting rates to stimulate growth across the euro zone.

Growth With Caveats

Germany’s Q1 growth aligns with forecasts but fails to dispel concerns about long-term stagnation. Trade tensions, particularly U.S. tariffs, remain a drag on recovery, even as domestic fiscal support begins to take shape. While the policy groundwork for future growth is being laid, geopolitical instability and sluggish private sector momentum continue to weigh on near-term prospects. A more robust turnaround may not materialize until these external pressures are resolved and fiscal measures are fully deployed.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

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Glendon

Political

Russia-Ukraine Conflict

President Vladimir Putin is open to peace in Ukraine and intense work is going on with the United States, but the conflict is so complicated that the rapid progress that Washington wants is difficult to achieve, the Kremlin said on Wednesday.

U.S. President Donald Trump, who says he wants to be remembered as a peacemaker, has repeatedly said he wants to end the "bloodbath" of the more than three-year war in Ukraine.

But Washington has been signalling that it is frustrated by the failure of Moscow and Kyiv to reach terms to end the deadliest land war in Europe since World War Two.

"The (Russian) president remains open to political and diplomatic methods of resolving this conflict," Kremlin spokesperson Dmitry Peskov told reporters.

He noted that Putin had expressed a willingness for direct talks with Ukraine, but that there had been no answer yet from Kyiv.

Russia's aims had to be achieved either way, he added, saying Moscow's preference was to achieve those aims peacefully.

"We understand that Washington is willing to achieve a quick success in this process," Peskov said in English. But news agency TASS quoted Peskov as saying that the root causes of the Ukraine war were too complex to be resolved in one day.

Putin's decision to send tens of thousands of troops into Ukraine in 2022 triggered the worst confrontation between Moscow and the West since the 1962 Cuban Missile Crisis.

Former U.S. President Joe Biden, Western European leaders and Ukraine cast the invasion as an imperial-style land grab and repeatedly vowed to defeat Russian forces.

Putin casts the war as a watershed moment in Moscow's relations with the West, which he says humiliated Russia after the Soviet Union fell in 1991 by enlarging NATO and encroaching on what he considers Moscow's sphere of influence, including Ukraine.

MORE WAR?

Putin in March said that Russia supported a U.S. proposal for a ceasefire in Ukraine in principle, but that fighting could not be paused until a number of crucial conditions were worked out or clarified.

On Monday, Putin declared a three-day ceasefire in May to coincide with the 80th anniversary of the victory of the Soviet Union over the Nazis in World War Two.

Ukrainian President Volodymyr Zelenskiy has said that progress in resolving the war depended on Russia taking the first step of agreeing to an unconditional ceasefire.

Trump said on Tuesday he thought that Putin wants to stop the war in Ukraine, adding that if it was not for Trump Russia would try to take the whole of Ukraine.

"If it weren't for me, I think he'd want to take over the whole country," Trump said.

U.S. Secretary of State Marco Rubio said on Tuesday that now was the time for concrete proposals from Moscow and Kyiv to end the war and warned that the U.S. will step back as a mediator if there is no progress.

Trump refused to answer a question about whether the United States would halt military aid to Ukraine if Washington walked away from talks.

Reporting by Reuters; Writing by Guy Faulconbridge and Maxim Rodionov; editing by Andrew Osborn and Sharon Singleton

Source: Reuters

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Gerik

Economic

Euro Zone Growth Surprises to the Upside, But Trade Tensions Loom Over Outlook

In a rare dose of optimism for the European economy, preliminary figures released by Eurostat on Wednesday showed that the euro zone expanded by 0.4% in the first quarter of 2025—double the 0.2% expected by economists. This positive surprise follows several quarters of sluggish performance and comes amid rising global economic uncertainty, largely driven by President Donald Trump's aggressive trade measures.

Resilient Start to 2025 Led by Southern Europe and Ireland

The regional performance was driven by a combination of stable core economies and stronger showings from smaller or southern nations. Germany, the bloc’s economic anchor, recorded a modest 0.2% increase, while France added 0.1%. Spain and Lithuania each delivered a 0.6% expansion, and Italy grew by 0.3%. Ireland outpaced all others, with a striking 3.2% jump—though such data should be read cautiously due to its highly multinational corporate base.

According to Franziska Palmas of Capital Economics, the Q1 print suggests the bloc began 2025 with more underlying strength than anticipated based on soft survey data earlier this year. However, she cautioned that this momentum may not last.

Tariff Pressures Set to Slow Growth in Second Half

Despite the strong Q1 performance, structural threats persist. The euro zone is facing 20% across-the-board tariffs from the United States, part of Washington’s broader trade conflict. Though temporarily paused for negotiation purposes, these tariffs—alongside sector-specific duties on steel, aluminum, and autos—are expected to weigh on exports and manufacturing output.

Palmas warned that the tariffs introduced in April will likely dampen economic activity in the second half of 2025. Germany, which is preparing to roll out a major fiscal stimulus, may see delayed benefits, with most of the impact felt in 2026.

ECB Rate Cuts Continue, But Growth Risks Persist

In response to lackluster economic performance and falling inflation, the European Central Bank has steadily cut interest rates. Earlier this month, the deposit facility rate was lowered to 2.25%, down from 4% in mid-2023. Yet, while the disinflation process is on track—evidenced by March’s 2.2% inflation reading—ECB President Christine Lagarde acknowledged that external shocks, especially trade disruptions, remain a threat to sustained recovery.

Markets remain cautious. The euro fell slightly against the U.S. dollar after the GDP release, while German 10-year bond yields declined by three basis points, signaling persistent investor uncertainty. Meanwhile, consumer and business sentiment indicators continued to slip in April, pointing to weakening confidence despite headline growth figures.

Encouraging But Fragile Recovery

The euro zone’s better-than-expected Q1 growth offers a welcome reprieve, but not a resolution. The fragile nature of the rebound, combined with heightened external risks from U.S. tariffs and lingering global volatility, casts doubt on the durability of the recovery. While ECB rate cuts and targeted fiscal policies may support short-term momentum, sustaining that growth will depend on how well Europe navigates the turbulent waters of global trade politics and internal structural challenges in the quarters ahead.