TD Securities' Global Strategy Team provides insights on upcoming US employment data, predicting below-consensus estimates for both ADP employment and ISM services. The report highlights a potential modest bull steepening on ADP as markets await the delayed NFP report. The analysis indicates a mean-reversion in ISM services, with expectations for a decline in employment and new orders.

US employment data outlook

"On Wednesday, Treasury's quarterly refunding will be in the morning where we expect auction sizes to remain unchanged. The market will be focused on forward guidance for any changes which currently flags that auction sizes are set to remain unchanged for the 'next several quarters'."

"We expect ISM services moved lower to 52.8 from 53.8 previously (consensus: 53.5). The decline is likely to be a mean-reversion after December's upside surprise."

"We look for declines in employment and new orders to be the main drivers in the release."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)