Conflicting Information on the $:
The last few reports have been indicating different things for the future of the $. On the $- side, there's man ISM, housing and unit labor costs down. On the $+ side, there's non-man ISM and jobs up. What does this point to? The Fed on hold for now.
The NFP number was higher then expected, but October was revised down. Personally, I can't see the frenzy that goes with the report; the number is repeatedly open to revision and the BLS has admitted it doesn't really know what it's doing. September job growth was revised to 203,000 from 148,000. That's an "error" of 37%! How do you trade this, when the new number is higher then expected, the previous month is revised down and the month before that is revised up? The bottom line is that over the previous 2 months, 42,000 jobs were added to the original numbers. Ok so to trade this now, you need to know the new number, all revisions, then you have to do the math to see if the revisions add or subtract jobs! (and it doesn't hurt to figure the average for the 3 months which was 135,00/month) Question for anyone with a news service: were both revisions announced?
I know that Merlin has a big job to do, but the revisions have to be added to the calender. If they aren't, people are gonna get killed.
The various components of the NFP came out exactly what you might think, given the ISM readings. Service jobs were up strongly, while manufacturing and housing shed jobs. It seems that housing and autos are doing badly, but that this is not spilling over to the rest of the economy as of yet.
The yeild on the 10 yr note rose and traders pared bets for a March rate cut. That's conflicting info.The big reason for the Fed on hold? Unit labor costs, which not only the Fed but the BoE and ECB focus on, are down and represent a smaller piece of GDP then ever before. Why might not Unit Labor costs be rising? Globalization. Companies have to compete on a global level and their prices have to be adjusted according to a global market. Besides, corporate profits are up, so Labor represents a smaller piece of their expense pie. Overall, the economy is proceding pretty much along the lines of what the Fed expects: moderate growth, no major slowdowns, inflation moderating.
What's the next big guideline on the $ likely to be. IMHO the Fed statement on Wednesday. Here's the paragraph that's been present the last 3 times:
"Readings on core inflation have been elevated in recent months, and the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting contained inflation expectations and the cumulative effects of monetary policy actions and other factors restraining aggregate demand".
Let's see if there's any change to the language.
The last few reports have been indicating different things for the future of the $. On the $- side, there's man ISM, housing and unit labor costs down. On the $+ side, there's non-man ISM and jobs up. What does this point to? The Fed on hold for now.
The NFP number was higher then expected, but October was revised down. Personally, I can't see the frenzy that goes with the report; the number is repeatedly open to revision and the BLS has admitted it doesn't really know what it's doing. September job growth was revised to 203,000 from 148,000. That's an "error" of 37%! How do you trade this, when the new number is higher then expected, the previous month is revised down and the month before that is revised up? The bottom line is that over the previous 2 months, 42,000 jobs were added to the original numbers. Ok so to trade this now, you need to know the new number, all revisions, then you have to do the math to see if the revisions add or subtract jobs! (and it doesn't hurt to figure the average for the 3 months which was 135,00/month) Question for anyone with a news service: were both revisions announced?
I know that Merlin has a big job to do, but the revisions have to be added to the calender. If they aren't, people are gonna get killed.
The various components of the NFP came out exactly what you might think, given the ISM readings. Service jobs were up strongly, while manufacturing and housing shed jobs. It seems that housing and autos are doing badly, but that this is not spilling over to the rest of the economy as of yet.
The yeild on the 10 yr note rose and traders pared bets for a March rate cut. That's conflicting info.The big reason for the Fed on hold? Unit labor costs, which not only the Fed but the BoE and ECB focus on, are down and represent a smaller piece of GDP then ever before. Why might not Unit Labor costs be rising? Globalization. Companies have to compete on a global level and their prices have to be adjusted according to a global market. Besides, corporate profits are up, so Labor represents a smaller piece of their expense pie. Overall, the economy is proceding pretty much along the lines of what the Fed expects: moderate growth, no major slowdowns, inflation moderating.
What's the next big guideline on the $ likely to be. IMHO the Fed statement on Wednesday. Here's the paragraph that's been present the last 3 times:
"Readings on core inflation have been elevated in recent months, and the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting contained inflation expectations and the cumulative effects of monetary policy actions and other factors restraining aggregate demand".
Let's see if there's any change to the language.
