Nailing it on U.S. employment day … better be lucky than smart
My futures broker was calling to congratulate me for putting on the TYQ3 put condor before the economic figure release … but with humility, I told him I was probably more lucky than smart as it is really a coin toss to bet on such a economic figure like this. All I know is cheap option structures sometime exist like in a casino if you count the cards and it becomes compelling to place a bet ,,…
Back to such a good number of 195,000 (exp 165,000) change in non-farm payroll with prior month revision of 20,000 to 195,000 and strong private payrolls of 202,000 (exp 175,000) with prior month revision of 29,000 to 207,000; this is as good as it gets above expectations with rise in average hourly earnings mom & yoy too. The key now is whether we get an orderly exit from the fixed income market from the U.S. that will emanate to the global fixed income markets. I seriously doubt that as so much money has poured into fixed income over the last 3 years that the process is painful especially for Emerging Markets that had seen the most inflows into local currency bonds.
Asianmacro will continue to be long DXY futures, long USD against EM currencies and for stocks a relative value long U.S. stocks vs short EM stocks will still make sense with stock picking even more important now.