ADP numbers this morning came out worse than expected.

ADP Non-Farm Employment Change: 38k actual versus 177k forecast versus 177k previous

ADP, Automatic Data Processing Company, numbers typically preced NFP, Non-Farm Payrolls released by the government, by two days and some believe are a good predictor for Friday's numbers.

However, many traders don't feel this to be true. 

There have been many instances where NFP did not confirm the accuracy of ADP. 

Nevertheless, one cannot deny the large 139k estimated jobs difference from what was expected, 177k.  To put it in perspective, the difference between what was forecasted and the actual number was 139k, a 78 percent drop.  The US created a mere estimated 38k jobs for the month of May.

Coupled with a poor ISM Manufacturing PMI, 53.5 actual vs. 58.1 forecast vs. 60.4 previous, we can expect NFP on Friday 8:30am EST to be below expectations.

NFP is forecasted, based on consensus, to produce 194k jobs in May versus 244k in April.  The actual number looks to be lower than projected.  Also keep an eye out for April revisions, the magnitude of which causes high volatility.

Market Summary:

Stocks lower, US dollar lower, treasuries higher

S&P down 1%, 11pts

US Dollar down most against JPY and CHF, funding currencies

USDCHF and EURCHF both at historic lows, .84 and 1.21 respectively

US 10yr yield dropped to new 2011 low of 3.05%, not good for the dollar