I had the pleasure of sitting down with Louis Gave last week and we discussed many of the pressing issues facing the global macro world. In May 2020, Richard Bonugli provided the FRA platform as a place to discuss the global outlook with a little bit of FORESIGHT. We HIT IT OUT OF THE PARK. Hopefully, our most recent analysis will provide similar investment outcomes and maybe succeed in clarifying some important issues facing the investment community as 2021 begins.
Posts Tagged ‘nonfarm payrolls’
Notes From Underground: Ho Hum, Time For Another Unemployment Number
February 6, 2020It has been an interesting first month of trading as markets have gone from searching for inflation fueled by a rise in commodity prices and a weakening dollar, especially in regards to emerging market currencies. The commodity rally coupled with an upward thrust in emerging markets ran into the headwind of the spread of the Coronavirus from Wuhan, China to several other nations. The whiff of inflation was subsumed by the onset of fears of global deflation as investors continue to be concerned about China economic activity grinding to a halt as quarantines are the prescribed remedy for preventing a genuine pandemic.
Notes From Underground: Looking at 2020 With Imperfect Vision
January 9, 2020On Monday, I had a chat with Anthony Crudele about the global macro impact on markets in 2020. As I always warn (in an effort to mimic MAO), there are many potential prairie fires in the world that COULD be ignited by a single spark. The Middle East is a potential prairie fire — every year. We were reminded of this over the last week as multiple events in IRAQ/IRAN brought the world to the precipice of cataclysmic outcomes. For now, the situation seems to be contained as GOLD, sovereign bonds and other tools of wealth protection.
Notes From Underground: The Powell Fed Turns Transient From Transparent
May 2, 2019May brought another Federal Reserve meeting that sowed more confusion. Maybe there is such a thing as too much transparency. The FOMC statement revealed the Fed thought “growth of household spending and business fixed investment slowed in the first quarter.” Coupled with this analysis was the OUTLOOK that “inflation compensation have remained low in recent months.”
Notes From Underground: Quick Note on Friday’s Jobs Report
April 4, 2019On Friday we have U.S. and Canadian employment. The Canadian report is important because Canada is an important trading partner of the U.S. so any slowing in Canadian employment may reflect of slowing cross-border trade. The consensus is for Canada to have a DECLINE of 10,000 jobs with the unemployment rate holding at 5.8 percent. From a global perspective, Canada is a good look at the continuing narrative about slowing global economy, which is significant as the New Zealand, Australian, European and Japanese central banks have used the slowing global economy as the reason for maintaining their current accommodative monetary policies. The Canadian dollar has been weak versus many of the key currencies so weak jobs should put more pressure on the Canadian dollar.
Notes From Underground: It’s a Drag Listening to Draghi Get Old
March 7, 2019ECB President Mario Draghi’s press conference was, once again, another act of flim-flam as he PIVOTED away from any tightening for the next [FILL IN THE YEAR]. There was NO SURPRISE as the TLTRO was well telegraphed various news outlets in recent weeks. What’s amazing is that the currency markets were surprised by Draghi’s press conference as the U.S. DOLLAR staged a sizable rally, reaching its highest level in more than three months. The YEN was stronger as the weak stock markets provided a sense of Japanese repatriation of invested capital, while GOLD performed dismally.
Notes From Underground: Hello, 2019
January 6, 2019“I am a sick man. I am a wicked man.”
So opens the Dostoyevsky novella Notes from Underground. Sometimes I seem to be caught in a similar existential trap as I analyze the global macro data and fundamentals. I am sick because I continue to pursue the opportunities that explode before me. I have taken a turn for the worse and become sick because of the constant flow of manipulated headlines crafted to purposely activate the trading algorithms. Tweets and headlines with no context have become the coin of the realm, especially for high frequency trading operations. But their role in the market jungle does little to dissuade me from honing my craft. The bottom line: Greater preparation and more patience is needed.
Notes From Underground: Weather Disrupts. Will It Disrupt Financial Flows?
October 4, 2018Based on the recent ADP report and other economic data, logic would dictate that Friday’s jobs report OUGHT to be very strong. If the data is weaker than expected, analysts will look to the impact from Hurricane Florence, ” the storm the authorities came to blame.” There are projections that jobs will be diminished by upwards of 50,000 so the initial algo traders will be thwarted. As usual, the critical component of the jobs number will again be the average hourly earnings (AHE), which are expected to rise 0.3% following August’s increase of 0.4%. If this number were to print 0.5% expect bond futures to come under pressure, even on top of violent increase in yields we have experienced this week.