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...
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