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With Banks ‘Stable,’ Traders Look To US Jobs Report
With the US banking system in stable condition thanks to a $150 billion per week Fed liquidity drip+, traders are free to refocus on the data. And just in time for nonfarm payrolls.
Consensus is looking for 240,000 from March's headline NFP print or, put differently, another robust read on a labor market which hasn't shown any signs of fatigue despite 475bps worth of rate hikes in just 12 months.
Should NFP print ahead of estimates, it'd mark an 11th consecutive beat. That'd be a record going
I think it’s safe to say that no matter what, the market will like it.
What’s your read on the UST long end continuing to rally lately? I get with the recent bank drama there would be a ‘flight to safety’ dynamic but that seems to be relatively subdued going into next week and as Powell put it ‘outlier cases’. It’s almost like the UST market simply ‘knows what’s up’ despite material data or fed pivot nods..
Don’t care if they 1/4% or not. Recession is now baked in the cake. We are going to have lots of disinflation.
On the bank topic, is the angst over deposit flight overdone? The recent $400 billion drop in deposits is only 2% of total bank deposits of $17.3 trillion. The vast majority of that $17 TR is still costing banks barely a pittance.
https://fred.stlouisfed.org/graph/fredgraph.png?g=125jg
JL – how recent are the datapoints shown in that chart?
Pretty much current (monthly data if I recall). The recent -$400BN drop is visible, if barely.