Welcome to NFP Friday. Let me immediately say that NFP fridays are one of the occasions when I stand down and let the market chop around. When the dust settles (on the tuesday after, usually) I step back in.
Asian equities were mixed overnight, most likely due to position squaring and lack of fresh bets ahead of NFP. Actually amongst US participants, it seems NFP and Hurricane Joaquin are getting equal consideration...however contacts speak of a dull reaction to any NFP print that's not close to 250k and/or a great print on the hourly earnings. Anything else will most likely see the USD remain soggy.
Just one note for those attempting to understand the market's reaction today post-NFP: there is the same disconnect now, that we have seen going into September's FOMC meeting. Market participants are pricing in no rate hike for October and roughly a 50-50 chance for December, whereas Yellen and other FOMC members are talking about a certain rate hike in 2015.
What does this mean? That positive data (where the actual print is higher than the expected print) will generate a stronger reaction than anything in line or worse.
Have a great weekend, see you back here on Sunday evening for the Game Plan!
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