Descent into farce

Just when you think it cannot get any worse....

The payroll headline was clearly leaked, as the USD got caned in the minute before the number. Karma proved to be a bitch, however, as the dollar actually reversed course after the market digested both the revisions and a dovish ECB rumour.

It wouldn't be a Friday with a descent into utter farce, however, and markets soon started spreading the rumour that California was somehow not included in the payroll data. Surely someone would notice if the largest population in the union and one of the ten largest economies in the world just went missing? It's not quite the same as leaving one's umbrella in a restaurant...

In any event, the data that was released has become worse than useless. The benchmark and other revisions added an average of 40k a month to payrolls over the last two years...rather a lot! Moreover, the durability of the labour market releative to trend appears to have improved as well; rather than 10 of the last 24 months' payroll gains registering above the 6m moving average, 16 of the last 24 months have now registered above the (old) moving average.

If you didn't like the January figure, just wait; it will no doubt be revised to the orignal consensus next month. The bond market's failure to sell off (and it tried) confirmed Macro Man's suspicions that the range remains intact. he therefore went to market and bought $25 million of the 01/17 TIPS bond at 99-17.
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