“The inevitable is always certain but not always punctual.” – Jim Grant ||
Hi all! For those preparing to celebrate the fourth of July, I wish you sunshine, hugs, and peaceful moments of appreciation.
This newsletter will be joining you in welcoming the summer by taking a break until Monday. I’m at the Real Vision event in Mallorca over the weekend – if you’re there, I’d love to say hi!
As we wind down for the weekend, today’s send is macro-heavy with a lot of charts – I figured you could use a break from the usual long stream of crypto-intensive text. 😉
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IN THIS NEWSLETTER:
Macro catch-up: jobs data, GDP and the yield curve
Market signals
Central bank alarm
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WHAT I’M WATCHING:
Macro catch-up
You would think the fourth of July weekend would be relatively quiet in terms of economic data releases, but no, the metrics machine grinds on regardless of days off and family plans.
Jobs data
On Friday, we get the much-hyped US employment report for June as well as the average hourly earnings, either of which could have an impact on a relatively thin bond market given the Thursday holiday. I should add, on a bond market already nervous about the oppressive political uncertainty, more on this below. Hopefully, everything will unfold as expected over the next few days and there will be no sharp moves – but I hope US traders get a nice relaxing day off tomorrow, just in case.
The release is expected to reveal a deceleration in hiring, with 189,000 new non-farm jobs added, vs 272,000 in May. If that transpires, that would be a steep drop, although we have often recently seen downward revisions on previous releases. As the below chart from Liz Ann Sonders shows, over the past two years, downward revisions have dwarfed upward adjustments.
(chart via @LizAnnSonders)
Today we get the ADP payrolls, which give a private sector view of employment trends. These sometimes give a hint as to what’s coming on Friday but not always, so they’re not really useful beyond giving us something else to wring our hands over.
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