Wednesday, August 02, 2006

Market waiting for Umployment Number on Friday

The market is very quiet today as everyone waits for the U.S. Employment number on Friday. Bloomberg is calling for an increase in employment (non-farm payrolls) of 144k after a June number of 121k. All the "predictions" that I have been reading/seeing is that the number will disappoint the market. If I were a betting man, I would certainly be leaning this way. EM currencies have strengthened considerably today and U.S. interest rate futures are slightly higher. I have been looking for lower rates in Mexico and Brazil off the back of a slowing U.S. economy. I think we will (and have been) beging to see the economic numbers begin to show this occurence in a bigger way. I also see this as the defining moment for the FED in the sense it should spell out what they are going to be doing at the end of the month. I am again leaning toward no change but the number on friday will dictate. I will also be going into the number with a few positions

Long Usd/Jpy
Short Euro/Usd
Short Usd/Brl
Short Usd/Clp
Short Usd/Ars
Looking for lower rates in



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