Annoying markets, a strong bearish stance and a tape determined to test it, with NFP due in 90 minutes and a forecast range wide enough to spin prices around and around. Inside: why the jobs reaction is inverted this cycle, the only chart currently behaving itself, and a payroll revision habit worth knowing about before the print.
...September’s hike odds fell 12.8 points on one governor’s interview and the two-year moved five basis points. We work through the arithmetic of why, and why the smaller number may be the honest one.
...Christopher Waller gave an interview and September’s hike odds fell from 63.2% to a coin flip. The two-year moved five basis points. One of those two numbers is lying, and payrolls print at 08:30.
...Crash cancelled again, and the grind continues into Friday’s NFP with the daily averages at levels that make the whole thing a frustrating experience to live through. Inside: a tight narrow range on the SPX 10 min with ADD at a bullish extreme, what the Almanac says about how midterm Septembers actually end, and a Wall of Wins that filled up anyway.
...ADP came in at 38,000 and the market still prices a September increase at two thirds. Working out whether employment has genuinely been disenfranchised, or whether we are comparing two instruments that measure different things, is this week’s whole job.
...ADP printed 38,000, the weakest since January, and the market still prices a September hike at two thirds. Either the barrel is doing the pricing or the labour market is about to matter a great deal more on Friday.
...The VIX has gone through 16 and is nudging 17, SPX is below its 2 week vwap, and the sentiment charts show something that has been building quietly since April. A handful of stocks have been carrying the indexes while the rest of the market has been voting the other way. Inside: what 7,600 signals, the Asian session break on ES, Bitcoin’s crown approaching the first assessment level, and a full Wall of Wins.
...Crude settled up 5.2% and the two-year moved six basis points, after moving nothing at all on Monday. Working out which of those two sessions was the anomaly is this week’s whole job.
...Oil surged 5.2% on US strikes near Hormuz and the tape called it the story. The number that decides September was six basis points on the two-year, and almost nobody looked at it.
...For most of this year the overnight bounce has turned up on cue. This morning it didn’t. ES has gone near vertical lower from the European open, Uncle Russ is leading the charge as usual, and the VIX is climbing towards the one level that changes the picture entirely. Inside: what 7,650 on ES actually trips, and why the inverted trend line on Bitcoin has just done its job.
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