Archive - Jul 5, 2013

US Change in Nonfarm Payrolls (Jun) M/M Exp. 165K, Low 77K, High 220K (Prev. 175K, Mar. 88K)

US Unemployment Rate (Jun) M/M Exp. 7.5%, Low 7.4%, High 7.7% (Prey. 7.6%, Mar 7.5%)

• Deutsche Bank: 145K
• Barclays: 150K
• UBS: 150K
• Goldman Sachs: 150K
• JPMorgan: 150K
• HSBC: 155K
• Citigroup: 160K
• Bank of America: 165K

After a few hours of calm yesterday, crude oil prices are once again surging back over $102 as the commander of the Third Field Army stated that troops deployed in Suez and South Sinai saw their "state of readiness" raised to "Maximum Alert." The announcement came after Cairo's airspace was closed for 40 minutes and flights were diverted to other airports because of air force drills. The 'state of emergency' has sent stocks sliding and put a modest bid into precious metals amid a call by Islamist allies of ousted Egyptian Prwsident Morsi to "take to the streets" and express their outrage.

• Egypt Girds for Muslim Brotherhood Protests (WSJ)
• SAC Capital's Steven Cohen Expected to Avoid Criminal Charges (WSJ)
• SAC insider-trading probe could last years (Reuters)
• RBI seen selling dollars around 60.59 levels: dealers (Reuters)
• China signals will cut off credit to rebalance economy (Reuters)
• Egypt army arrests key Muslim Brotherhood figures (BBC)
• Rise in Steel Prices Alarms Buyers (WSJ)
• Draghi-Carney Seek Independence Day Break From Bernanke (BBG)
• Samsung Warns Results Will Miss Forecasts (WSJ)
• Russia Prosecutor Seeks 6 Years in Jail for Putin Critic Navalny (BBG)

While the skeleton crew of market participants are still digesting yesterday's uber-dovish, "forward guidance" conversion by the BOE and ECB, driven in response to the Fed's increasingly tight (at least relatively) monetary policy, they now have month's biggest economic and market catalyst to look forward to. In a day which promises to be rife with illiquidity as the bulk of US market participants are within 100 feet of a sandy beach, we are about to get the number that will shape the market's mood for the next month: will the Fed's tapering planes be strengthened in response to strong NFP, or not. As Deutsche accurately points out, the curveball to throw in is that June-August numbers have tended to be seasonally weak over the whole period we have data (back 70+ years) and again over the last 10 years. Today's number is therefore going to be fascinating. A number between 150-200k is unlikely to change anyone’s opinion on the Fed whereas a number below might start to build a case for a taper delay. Above 200k and the September taper momentum will build. Such a high number (especially in a weak seasonal period) is unlikely to be great for markets but the ECB/BoE might have cushioned some of the hawkish blow for now. For the record the market is expecting 165k on payrolls and 7.5% (DB same) for unemployment. A full NFP preview post is coming shortly.

While we all eagerly await for the final 80 pips in EURUSD to trickle down before Stolper's latest "long EURUSD" masterpiece is stop lossed out in under a week and precisely in line with expectations, here comes Goldman with its latest fade reco, this time in the form of a "Top Trade for 2013" (supposedly this means an epic muppet steamrolling instead of just the occasional Kermit speed bump), namely to go long UK equities (the FTSE 100 Dec 13 futures) with a target of 7100 and a stop loss below 5950 (or 6% lower). If Stolper is any guide, this should be the easiest 6% imaginable. Of course, the hypocrisy of Goldman upgrading the UK market following its tentacle being appointed to run UK monetary policy, and the Bank Of England, with the sole purpose of boosting the UK "wealth effect" (and Goldman bonuses), does not escape us...

Whether or not you believe PMs will serve as the ultimate store of wealth as the global fiat monetary system collapses should have absolutely no bearing on making the intelligent decision to remove your financial assets from under the domain and inevitable confiscation of global bankers and their State-run tyrannies.  Independence Day is a fine day to start the process of taking back our freedoms from the tyrants that rule over us.