Read on the Trading Floor - 08 Mar 2024
Today’s focus… US labour mkt, Biden starts his campaign, BoJ and much more
Macro Themes At Play
Theme 1 - US Labour Market
Theme 2 - Biden's election campaign has started
Theme 3 - BoJ
Theme 4 - Week Ahead Previews
Further reading and listening of note
Theme 1 - US Labour Market
NFP 275k vs exp 200k
UER 3.9% (exp 3.7%) and a 2-year high
AHE 0.1 MoM vs exp 0.3% and previous 0.5%
AHE 4.3% YoY vs exp 4.4%
Goldilocks with headline NFP beating but softer than expected AHE (good news for Waller) and of course the rise in UER to a 2yr high. As a result, USD remains on the backfoot to end the week as the Fed are "not far" from cutting and today's data will do little to change that narrative. Inflation is of course crucial and next week's data will confirm if the Jan inflation spike is something to truly fear or was just a seasonal blip in the disinflationary trend towards a soft landing.
Brent Donnelly am/FX - CPI > AHE > NFP
The NY Times - The jobs report comes as the Fed considers the timing of interest rate cuts.
Axios - U.S. economy adds 275,000 jobs in February as unemployment rate jumps
Theme 2 - Biden's election campaign has started
A fiery state of the union address has dispelled some cognitive impairment fears and led to Biden having the two biggest fundraising hours in the 2024 cycle. He may not have named Trump but he attacked him on all fronts... #1 Ukraine / NATO allies, #2. Jan 6th insurrection, #3. abortion rights, #4. taxing billionaires, #5. immigration / border security and even went off script to discuss the economy... "the landing is and will be soft". According to Politico, in terms of strategy "it’s hard to imagine how the SOTU could’ve gone much better for Biden."
Politico - The turn-the-tables SOTU
Bloomberg - Key Takeaways From Biden’s State of the Union Address
The NY Times - How Cable News Reacted to the Speech
Axios - Biden's State of the Union hecklers face internal GOP groans
FiveThirtyEight - A Very Political State Of The Union
Axios - 5 key takeaways from Biden's State of the Union speech
The Guardian - Who is Katie Britt, the Alabama senator who gave a rebuttal to Biden’s State of the Union?
Theme 3 - BoJ
USDJPY 147.00 given with US10s @ 4.08%, BoJ hawks pulling mkt expectations of a "hike" into March and seasonal’s weighing on cross-JPY ahead of Japanese financial yr end.
Reuters - BOJ's growing confidence in prices, wages shifts focus to March meeting
Reuters - Japan Inc set to offer bumper pay hikes, paving way for BOJ stimulus exit
Theme 4 - Week Ahead Previews
Next week is all about CPI: Does it confirm the Jan uptick is embedded or was it just a seasonal blip
Nomura - The Week Ahead – US CPI, UK Labour Market Data and China CPI
NatWest - A major week for major currencies
S&P Global - Week Ahead Economic Preview: Week of 11 March 2024
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