Kit Juckes of SocGen sets the lay of the land, as we wait for the Jobs Report:
It’s about as quiet a start to a US Labour Report day as I can remember. Is that a harbinger of chaos? I’m struggling to see where volatility can come from. The market looks for +215k on jobs and 65.6% on unemployment. That would be risk-friendly. Indeed, anything between 175k and 250k or so is risk-friendly and could propel SPX through 1900 at last, while driving iTraxx XO back towards 250bps, and EMBI spreads tighter. In FX, MXN, TRY and ZAR are the likely ‘winners’ on an OK-but-boring report. In G10, USD/JPY may get a bit of help; beware EUR/USD getting a lift on the back of EUR/JPY and likewise, AUD/JPY. We still like NOK/SEK but I can’t think why that would react. In ‘other news’, we get PMIs in the bits of Europe which haven’t already released them.
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