Read on the Trading Floor - 05 Jan 2024
Today’s focus… ISM > NFP, US CPI, XBT ETF
Macro Themes At Play
Theme 1 - Why trade NFP?
The mean reverting lottery print is a vol generator but it's rarely a trend setter, especially after a week of USD strength and US fixed income selling off. Today's data set in isolation hasn't given us a lot of new news that we didn't already know from the US labour market. As we mentioned in yesterday's Read on the Trading Floor, it's bending not breaking. In fact, today's NFP / AHE combo is just another input after a week of labour prints, which one is the most important?
ADP - better than expected
Initial Claims - closed the year at the lows
JOLTs - recession watch in hiring
NFP - headline strong but revisions lower
AHE - strong real wage growth... 0.4% vs exp 0.3%
ISM Employment Index - look out below...
Follow the latest market narratives through our curated research & commentary channels on @HarksterHQ ... some of the commentary that has published post NFP follows ...
ING - US jobs report suggests no pressing need for the Fed to cut rates
SEB - Still tight labour market with disappointments to earnings and participation for the Fed
Economic Policy Institute - December jobs report caps another year of strong job growth
Brent Donnelly - Friday Speedrun
Theme 2 - ISM defined the session, not NFP
Having spent all week commenting on the US labour market, it was in fact ISM's tumble lower towards 50 (50.6 vs exp 52.6) that dominated today's session. In particular the Employment component in ISM services (43.3 vs prior 50.7) fell to its lowest level since the survey began in 1997, not including Covid shutdowns (The Boock Report). As a result, US2s rallied to 4.33%, 12bps off the NFP wides, something that
has gotten involved in.
Theme 3 - The week ahead = CPI + XBT ETF
Newsquawk - Week Ahead: CPI data from the US and China are the highlights; US earnings season also gets underway
Nomura - The Week Ahead - US, Japan and China CPI, Bank of Korea Meeting
SEB - Interesting data coming up at the start of the new year
S&P Global - Week Ahead Economic Preview: Week of 8 January 2024
US CPI dominates the week ahead previews as the market's pricing of > 5 cuts needs the disinflation miracle to continue.
ㅤㅤㅤ
👏 If you found this briefing helpful, please show the desk some appreciation by giving it a ‘Like’ or a ‘Comment’ at the bottom of the page.
Top Pieces
Discovered on Harkster.com
FT - Maersk reroutes Red Sea ships ‘for foreseeable future’ as container rates shoot higher
- - The Other Lever
Unchained - Key Elements for Successful Spot Bitcoin ETFs
- - Coinbase's fate is tied to Bitcoin
Stay informed throughout the day with our new commentary channel (‘Intraday Market Colour’) highlighting key notes, topics du jour, and HarksterHQ’s market updates around key data points and headlines.
Available on the Harkster Research Platform.
The information provided in this post is for general information purposes only. No information, materials, services, and other content provided in this post constitute solicitation, recommendation, endorsement or any financial, investment, or other advice. Seek independent professional consultation in the form of legal, financial, and fiscal advice before making any investment decision.
While I have been in markets for a very long time > 40 years, I don't know if I can recall a potential event that has been more hyped than the BTC ETF. it feels so much like whatever happens, it will b e a damp squib