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The Scenarios Ahead Of The "Most Important NFP Number In Years"
From Deutsche Bank
It’s that time again when financial markets (including ourselves) completely fixate on a number that is often heavily revised as the months progress. However such a crazy fixation keeps us strategists in work so we should rejoice in the madness. The expectation is that US payrolls will come in at 163k today (u/e rate at 7.5%) with DB at 125k (u/e at 7.5%). The most recent estimates have generally been on the lower side, with most forecasts over the last 24 hours coming in at the 130k-150k level. As ever watch out for prior revisions. For example the last payrolls report in early May showed significant upward revisions in February (332k v 268k) and March (138k v 88k). It’s also worth being aware of the seasonals. The chart in today's EMR shows that since 1993, the average and median monthly payroll number has taken a notable turn lower over the summer months (between June and August). Indeed the average final payroll print for June, July and August since 1993 were 81k, 91k and 75k respectively and are meaningfully lower than averages seen throughout the rest of the year. This is perhaps more of a topic for the next 3 months but we also noticed that May payrolls have fallen short of market consensus three years in a row with an average miss of about 30k. We've no way of knowing whether this will repeat but tapering decisions could be made on numbers that could either be heavily revised or seasonally distorted. This adds to the complexity of markets at the moment.
So what are the scenarios for various potential outcomes? In simple terms we think a number close to or above 200k will intensify the tapering debate over the next few weeks. This is unlikely to be risk positive but there will be some offset from the strengthening of the recovery. However we think the tapering fear will dominate in a risk off trade. A number just above 150k might ease some of these fears but it won't completely eliminate them. A number between 75k and 150k will probably be the sweet spot for markets as the Fed will be pushed slightly off the agenda. Bonds will likely rally taking the risk complex with it. A number below 75k, although unlikely, would definitely reduce taper fears but might worry markets on growth and is unlikely to be as positive as a number between 75-150k. These scenarios are obviously fairly crude and have to be seen in conjunction with the revisions.
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Oooh Oooh this is so exciting! The anticipation is tantamount to reaching climax, as well it should, because we will be fucked either way.
The market is a bad joke.
Reading the "new and improved" ZH is like watching paint dry!!
Markets rally on a 175k NFP print when there are 90 million NOT in Labor Force???
http://confoundedinterest.wordpress.com/2013/06/07/non-farm-payrolls-increase-175k-but-89-7m-not-in-labor-force-markets-rally/
Who cares what the number is as long as I get it 15 nano seconds ahead of the rest of you.
That's what he said.
Blah blah blah (as far as the "most important NFP" quote goes!).
More media spin to frame what comes next (massaged 'good news') to juice the markets.
MW was running a story that the US doesnt need that many jobs!!!! hahahahaha
good luck with that
K@
"A number between 75k and 150k will probably be the sweet spot"
Fuck you Deutsche Bank. This is all a game....until it isn't
I think it's very important that the low number be IRRELEVANT and the high number be IRRELEVANT
Exp. 163K
DB (LaVorgna, no better than the HedgeHog): "125k" (in the sweet spot for a rally)
Given LaVorgna is wrong nearly as much as Stolper, I expect: 180K, and a quick sell off to 50DMA again when CNBC spins the good number as good somehow.
The number will be revised downward later.
Slaughterer position: ES limit orders 3-4 points on either side of the last ES print before 8:30am with stops entered as fast as possible after fill.
Will I succeed? Probably not, if the algos zig zag the ES up/down real quick.
i really like to see NFP when the data actually bad they make it good, when it good they make it superb
The most important number in years.....until next month's most important number in years. This is the language of those who want higher readership/viewership say (tv, newspapers, internet sites, etc). Don't get me started on "breaking news."
here is my prediction. Rick Santelli will speak with a loud voice and numbers will be going bomkers behind him creating the appearance of a market. several panelists will try to yell over each other and it will end up sounding like a chicken coup. many of us on here will get flattened by hft thinking we have some insight because we were just spoonfed moar garbage.
You were close, you described the ending of QE almost infinity.
Jump the shark with this one. Is that you CNBC writing the script for this article?
Bernank needs the Fed out, so the number will be good for tapering. That's the number that represents reality.
Numbers will be in line or higher....Dow goes nuts....that ominous feeling I had about imminent societal collapse goes away.....again....
manufacturing jobs lost. Hysterical.
What's going to happen. I think we all have a pretty good idea what it is just hard to predict when. There are those who read the books of history and there are those that don't. Centralized fiat currencies never end nicely.
http://www.youtube.com/watch?v=78juOpTM3tE
Those who read the books knew what was going to happen so they were prepared to film those who hadn't read the book.
The author was asked why he killed off people the way he did. IIRC he said the common story is that even though the hero is outnumbered 20 to 1 you know he is going to be victorious because he's the hero. So I like to keep my audiance in suspense.
So many people are going to be surprised because they didn't read the books.
I am going to make the most accurate prediction of them all that is never wrong. I have no fucking clue what it is going to be.
If the numbers come in higher, well that's kinda bad, but maybe good. If they come in the middle, well that could be good, maybe not very good, but pretty good, but a bit bad. If the numbers come in low, well that's good, but bad, which is good. So that's pretty bad. Of course they will be revised later and if up, that's bad, but down, is also bad, so that's good.
In other news the frizzbats ate the googlebongs up 42. Markets responded by going up 12 hepples. The president of dongleberry said "muffins and raisins are not a good mix" at which point the market promptly sold off 198 grizzles.
Fear theTapir
"Capitalism will commit suicide!" Karl Marx
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NFP 175k. Should have known they couldn't let this one come out bad...Dow to the moon.