Clients should have strategy in place set for “surprising” vigor in US jobs creation. That is, we have known for several weeks that job-related activity would eclipse Street estimates. (It does not matter that the activity is not a barn burner. It only matters that we capture that which is not on the radar screen; in such a way we capture price change.)
However, having missed this key turn economists may now over-correct, not wanting to be rolled twice. Thus, many are predicting a burst tomorrow in private payroll, in hours and in earnings. All of this will come in Q1 but maybe not just this quickly. Fine. If tomorrow’s print does not live up to expectations, use any correction to add to, or establish trades in FX, equity or FI (not much here given E-Z panic) which you may feel will do well, given what we know to be reality ahead.
In the larger sense clients are to remain very constructive on the US. Our several anchors (jobs / spending / manufacturing) will continue hold through Q1.
Robert Craven
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