Friday, December 03, 2010

Groundhog 28 Months

It's US payroll day today, but TMM can honestly not remember an NFP release that holds less interest for markets. Given that just about all asset correlations are at 1, markets are (correctly) trying to focus on the ultimate driver, which is the condition of the Eurozone Sovereign credit market.

The only was that TMM can see NFP being relevent is if the number is materially lower than 100k, which could perhaps dampen the recent enthusiasm on US growth. On the other hand, it might put a stop the slow pnl drip out of UST longs' trading books. But certainly anything close the the 150k consensus forecast will represent a continuation of the recent trend.

In fact, rather than write a post, we'll just refer you here to a post Macro Man put up 28 months ago:

It's US payroll day today, but Macro Man can honestly not remember an NFP release that holds less interest for markets. Given that just about all asset correlations are at 1, markets are (correctly) trying to focus on the ultimate driver, which is the condition of the credit market.

The only way that Macro Man can see NFP being relevant is if the number is negative or near-negative, which could perhaps encourage the Fed to relax its language next Tuesday. Failing that, Macro Man would expect the FOMC statement to retain its relatively tough stance, which could prove to be an ideal catalyst for the start of the next downleg in risky asset prices. Certainly anything close to the consensus 125-130 forecast will represent a continuation of the recent trend.


As for views on all the other stuff going on, it will have to wait. Behind the scenes TMM are still not out of their "bright lights big city" meets "trains, plains and automobiles" real life experiences...

12 comments:

Anonymous said...

Why not copy/pasting then?? Would have avoided the "relevent" typo in the new version...

Anonymous said...

It is out...39000. Just there is no big bang. It tells us something about the market, isn't it?

rene-korda said...

So, we have NFP materially lower than 100k. I wonder if that'll make them relevant for more than just one day.

Richard said...

Yes ..with only 10 point dip on spooos? Buy the dip ..

Just buy the dip ..

http://www.youtube.com/watchv=jllJ-HeErjU&feature=player_embedded

JUST BUY THE DIP !!

leftback said...

Weak data is Mr Market's friend. Just buy the f*cking dip until the liquidity pump is turned off...

Welcome to ZIRP/QE, where the only thing that could go wrong would be an actual economic recovery. USDJPY being absolutely shellacked, looks like Mrs Watanabe was short the yen again...

Nic said...

I wonder if the jobs numbers will be relevant for more than just an hour or so.
Canadian jobs numbers no better, all the jobs added were part time (and no doubt will be gone the first week of Jan).

leftback said...

Nic,

Agreed completely. We will not know the dodgy employment situation for a while. Even if the seasonal retail jobs are indeed gone the first week in Jan, it will be Feb before we see that reflected in NFP, although there may be hints in the January claims numbers when the blokes presently sitting in the mall dressed up as Santa start to show up to sign on.

No really significant data from now until EoY, and the chance of anything that leads to withdrawal of liquidity is less than zero, so that means... JBTFD.

Nemo Incognito said...

I agree with JBTFD in developed markets but HSI is finding it v hard to get it up. I think this will be the dynamic in EM next year for the most part - sure the QE is coming, but as soon as it prints some "micro" or "administrative" measure comes in and beats you down again. Selling vol on BOVESPA and HSI anyone and getting long BRL denominated FRNs?

FX said...

No Way, PoLEMIC, did we just witness another digestive period in the ref,again apprx one month after the austrians are taken out to the shed.

FX said...

Oh, I forgot, overlap the TLT vs digestive periods, who leads who , huh?

Anonymous said...

Am I the only one who hasn't got a clue what FX is on about in his comments?

Anonymous said...

nope!