 Okay, hello and welcome test test Just getting things all set up. We'll do a bit of a rundown Starting in the next couple of minutes. Just gonna get everyone on board For this latest release of US non-farm payrolls coming out in just over 15 minutes So welcome welcome everyone Okay, George back house Good to have you on Andrew. Hope you are well. I Haven't seen your face appearing in any other adverts recently Andrew What's the latest? Samsung Apple Okay, we'll give it a few minutes get people on board And then we'll have a bit of a run-through about what we can expect from the upcoming Payrolls figure. Okay. Hello. Hey Finn. I hope you well Okay. Yeah, just getting everyone else on board People logging in We'll give it One more minute and then we'll have a bit of a discussion Look through the charts and talk about what's been going on and then What we can potentially expect Coming up shortly. Okay. Hello. Just joining us. Have you well? Yeah, a bit of an impromptu live session Non-farm payrolls, but I know that we are amplified working with a few different groups at the moment. So I Just wanted to do this live as a as an exercise to go through a major news driven event And I know a lot of people actively trading this day today. So more than happy to jump on They're gonna have the score come throughout So should get the audio announcement as well when the news lands, but I'm gonna turn them off for the moment And let's get straight into it. So yeah, thanks very much for joining me. I'm gonna be live Probably between from now for half an hour. So the run-in the live release will do some immediate Post-market analysis. I'll try my best to pick up questions as we go along But definitely towards the end more than happy to help my mom if I can so What is in store? Well the release of typically What is traditionally one of the major data points coming out of the US and particularly at the moment in the context of Everyone asking the question about What is the state of the US economy? What is the speed of the slowdown ari in a recession? And all of this essentially is shaping then the discussion of What are the feds gonna do come their meeting their next meeting is actually quite a way off It's not until the 21st of September. I must stress them that even from the onset Given that exact reason I am slightly more leaning on the side that this data Probably won't have a lasting impact Not unless it's surprisingly shocking for whatever reason and the reason for that the rationale is that we're gonna get another labor report Obviously the September one before then the Fed decision. We've also got CPI reports to come another very important information as far as the Fed are concerned as well as market participants Which is gonna really shape that expectation for the September meeting You know such as like the saying in politics, you know, like a week is a lifetime in markets You know a day is a lifetime So if we're talking about speculating our markets right in their positioning and what does that positioning look like at the moment? well, if you're looking at the Federal funds rate futures so the short end to get an idea of that that's most kind of ultra sensitive to interest rates Changes in expectation at the moment probabilities reside with a 50 basis point rate hike But only leaning in really a 60 40 split 60 in favor. This is current market positioning of 50 and the remaining 40 games still for a 75 clip Which would be in fitting with the back-to-back 75 as we've already had so Obviously, this is all very important for how the market might react right now How important or how accurate these figures for September? I think you need to take it with a large pinch of salt and where we're at at the moment in time Because of the time difference as I've said so as far as non farm payrolls is concerned Let's talk about that a bit more detail There there are a number of things to be aware of if you are going to ever trade this as a news driven event The first thing is is the mechanics of how this information comes out And that is that there's a lot of information and so therefore trying to be super aggressive Hit market At market price is never really a sensible strategy. I don't think when it comes to non farms I think you've got to be much more disciplined and pick your spots Thereafter the initial noise that you typically see The common question then is well, how long do I need to wait to pull the trigger? It really depends it really depends on the quality and composition of the numbers you're about to see so as far as the numbers are concerned and I always talk about payrolls in an in an algorithmic First in first out type system reaction because that typically is what the initial move is based on You will see if you're new to watching payrolls Which I know some on the call are is that? Going into the release you start to see lots of jumpy price movement in your kind of main US products So S&P or the T note or the US dollar so you're a dollar something like that you'll start to see in the seconds just before the data comes out lots of jumpy price action, which is just a byproduct of the Illiquid nature of the bid offers going into the release so the market starts to jump around a bit You almost see this instantaneous Lift in prices or the opposite as soon as the number hits and that's the kind of The owl goes plugged into like the fire hose, which just snap Pull the trigger and they fire Dependent on the first input the first input is the headline change in non-farm payrolls so Again just covering all bases non-farming to extrapolate out the kind of seasonal jobs that we get in the US and looking at the Employment situation on a national perspective gives us the kind of life blood if you like of how the economy is performing and like to perform will give us some insight about the future and So here you're looking at a figure of 250,000 which is a quite a market slowdown in a number of jobs that were created in the prior months Which was 372,000 to have that to have a bit of perspective We've been kind of hovering around this 380 mark quite consistently so this is a leg down from that to some degree and I guess a lot of that is conditions of cooling Amid the tight labor market that we have at the moment and as you can see it's far lower figures than what we were seeing During the period of kind of Q4 of 21 and Q1 of 2022 so ranges are super important and Something that should not be downplayed and what I mean by a range. It's these subsequent figures here so 75 and 325 if you're trying to think of it in your mind's eye as a normal distribution Kind of curve and these are of Wall Street estimates So straight down the line the median estimate is 250 on the outer extremes. This gives you then your kind of framework of Expectations so the extremity of the most optimistic 325 most pessimistic 75,000 This is important because then breaches of these outlying extremes of that distribution of expectations Subsequent me creates a much larger initial knee joint reaction certainly as far as an algo is concerned You know basic rule parameters It breaches top level of this exercise position size more larger of that so Key here and the reason why not to get too involved in the initial spikes if there are any Is that non-farm payrolls is more than just one number if I just made it a bit bigger You can see here. There are private payrolls manufacturing payrolls government payrolls Unemployment rate average earnings month-to-month your in-year average weekly hours The list goes on and then you can double down and you've got Canadian data here as well one thing I would suggest is Personally, I'd recommend never trade the CAD currency on the release of non-farm payrolls Canadian jobs data comes out at the same time and it's like trying to catch hot hot knives like a Falling knife. I should say it's like it's impossible. It's so volatile if you're looking at the CAD So if you're looking at US instruments, I'd say just focus on the US figures first one being then the headline changing non-farms The unemployment rate that is expected to remain constant at 3.6 and then keep an eye on the average hourly earnings numbers They're expected to be at 0.3 and 4.9 4.9 nearing years a leg down from what it was previously Which was north of 5% giving us some indication about this inflationary Perspective if you like of the current economic Situation they're the main ways to interpret this you've then got to look out for the revision to the previous So if you get a headline beat, let's say What if the revision to the previous is down? if in a sense then that Neutralizes any positivity on more jobs being created in the prior month because the month prior to that was revised down So net net is a neutral reaction So this is where you get lots of two-way price action and you've got to be super careful of that All right, got a couple minutes. So final things I Was looking at I think there's a crib sheet here. Yeah So Well, this is the old crib sheet in fact, so I don't have the latest one But to give you an idea here is from an educational point of view what people will do ahead of non-farms is You will look for indications of the state of the labor market ahead of the official government report now that could come from challenge job cuts, which is just a measurement of Private sector job cuts in different areas like technology finance healthcare and whatever then you've got benefit claims So initial and continuing claims and we generally track these on a four-week moving average Which allows us then to see if there's any unusual patterns there Which might indicate more people less people claiming benefits. You've then got ISM So the Institute of Supply Management. You have a fact a manufacturing reading and a service reading when you break those down they have component kind of constituents of which include things like The state for personal managers in manufacturing for new orders for inventories. These all gives us different types of information to help us I guess substantiate our view on where the economy might head in the future But it also gives us an idea about the employment situation for those two key sectors that make up the economy You don't have other ones like more confidence based on the consumer level So in Michigan and the conference board the ADP figure Not so much available this time, but typically is seen as quite a main precursor that's private payroll measurements in America and statistically speaking should be fairly correlated in a way Or be it's not always the case to what the Labor Department's report would suggest So this is kind of the overall summary So in terms of reaction As I said the overall range on the headline is kind of from 75 on the low to three to five To be quite honest with you a number on either side of that. I'm not really that fussed about in terms of Shifting meaningfully the market's expectation about what it thinks that the Fed is going to do and subsequently then creating a large or indeed sustainable impact on market prices That doesn't mean we can't we might not see some short-term price gyration We probably will so a certain extent the way this would typically work I guess from a reaction function is if we get a low ball number. So let's say we get a Step down in jobs into a negative print Which is not expected even at the most pessimistic estimate and then you get average out of the earnings also down Which is kind of lowering that inflation argument then that means that the Fed are probably going to have to slow down even more on their future tightening and that would be probably NASDAQ equity US equity Positive it would probably be dollar negative. So you're a dollar cable positive T-notes would probably move up because yields would move down and gold may appreciate under that scenario So just to give you some some kind of context as to how short-term market mechanics might work But again was payrolls as I showed you on that initial kind of list of data There's a lot going on my best advice always with payrolls it's just remain disciplined and Interpret and then look to take action accordingly the more uniformity there is to the numbers pointing in one Direction the easier it is to trade the more mixed signals you get the more reason to stay out of the noise and not get involved Unless you get an extreme scenario All right, I'm going to turn the squawk on and then we'll listen in under one minute Okay, just under 30 seconds so on my chart I'll make them bigger as we talk through them I've got you're a dollar left cable gold S&P and NASDAQ I can bring in oil T-notes US dollar index and the rest as we go through it Okay, should be about 10 seconds now 10 seconds 5 to 8 that's 5 to 8 but they expected of it to you at 50 The unemployed rate 3 spot 5% works within 3 spots 6% the prior was advised higher to you at 3 9 8 And the earnings mother mother 0 spot 5 books but the 0 spot 3 year of year 5 spot 2 So it's a bullish report across all major headlines forecast beating top of the estimate busting headline The unemployment drop dropped more than expected an average hourly earnings are up. So more inflationary So higher jobs and more inflation. So dollar immediately catching a bid Stocks not liking it at all. This is the opposite of that scenario. We just discussed So this is where you've got really healthy job creation with inflationary pressure the Fed are gonna have to tighten faster So dollar appreciation yield appreciation stocks don't like that scenario And so we're getting downward pressure on the NASDAQ 100 S&P down currency pairs down and gold down as the dollars popped on the back of that information 34 spot 6 so just So just in terms of the overview of that report then so that was a substantial beats on the headline there 5 to 8 We've expected to 50 an unexpected decline in the unemployment rate and the earnings components were further than expected So are we are seeing some immediate downside here in the treasuries Downside in the equity complex and appreciation of the dollar which is ripped through the 106 mark Which have been kept in the index it's like high on 106 51 Yeah, so the squawk just kind of reiterating what we were just discussing there. So it's surprisingly Strong and it's all as I said, there's a uniform direction to the data which makes the directional movement in assets much more clear So as you can see here the NASDAQ's at quite a critical level now short-term because we're just approaching the low that we printed in Yesterday's session. So be interested to see how the NASDAQ responds here finding and you can see that those initial speculative shorts on the NASDAQ hit on the back of the number You can see just some bailing out of that as we've initially touched that low that we had at 13185 In the futures market. So that would be a key level any further breakdown in the NASDAQ there then it could trade quite heavy down to that double top that we had on the first and the second of August Which would be a decent run lower Elsewhere looking at cable. It's quite an interesting setup as well. So the dollar The dollar movement on the back of that So just coming down to in cable the low that we had on the trough of the Bank of England kind of doomsday Sterling led weakness from yesterday on the back of a prolonged deep recession and That lines up marries up nicely with that low that we had on the 29th. So for me, then there's some key technical areas here We need to watch from a Support perspective so you've got this level here in cable and Really want to see what it's like when it's testing if we start to see the NASDAQ break out and cable break that level You've got gold also Similarly, just testing it around those lows. You can see here This is quite a key level for gold as well around this current level. You've got that high that we had So some of the price activity On the third it was an inflection point through yesterday's session came back found a nice support there yesterday afternoon We're right there at the moment. So now it's about if it's just The ship has sailed for the short to hit at market now. It's about now decision time You can either play the market back up and fade the move But that would be counter-intuitive of the fundamentals. We've just seen so to initiate the short here If you were that way inclined, I would have to see these levels gold Cable NASDAQ they've got a break and then come back to the pullback on the break level To then want to get in and and get into that short position So only then under those conditions I would say would you really feel a bit more comfortable with conviction to want to enter that market So here just marking up. This is the key level see the NASDAQ's just sort of testing it at the moment And then as we come further down the next level in the sand would be here And that would be a nice execution on the short But again, I'd want to see the correlation play out to give it a bit more momentum That that could then add to what already is a pretty decent initial snap on the move Just a quick look at T-notes. I'll make that big Here's the US 10 year. So as you would expect yields popping on that kind of hawkish report That doesn't look too interesting at this point in terms of technically where it's sat Not unless we start to get quite a bit further lower So I wouldn't be using that so much as a technical cue on those support levels like those other products But here certainly I'd look at it from a momentum perspective to just see how that downside is shaping up Yeah, the NASDAQ's having another little look at that level Gold though not playing to that tune So gold's had a decent bounce now off that low and that Just keeping an eye elsewhere terms of the other figures to be aware of the birth death adjustment Terms of net birth death forecast 309,000 The two-month net revision was a positive 28,000 so it's pretty much across the board a very a very hawkish report And it's definitely going to fuel the flames now back towards 75 away from 50 So that 60-40 split that we saw that will already be in flux right now And obviously we can revisit that just before we come off To see where the land lies Yeah, in terms of the yield curve to two tens yield curve inversion has Is now To minus 42.5 basis points now to make this make sense essentially This data would suggest then that I've got a hike more aggressively That then is going to create then a Bigger economic slowdown So you're going to get higher yields in the short term Decreasing yields in the long term further inverting the curve essentially so it would mean then that The market is kind of reacting in a sense to the fact that you know in an aversion type play That things are going to get worse because the Fed are going to have to be more aggressive in the short term Hopefully that makes sense Yeah, just looking at it at the moment It's losing a bit of appetite now see the NASDAQ holding here in that bottom chart Cables holding gold is holding What you tend to see when you start hitting these these key technical areas is the market Comes in kind of waves You start to see like the order flow come in the momentum the shaping up of the candle on a very short time frame And you can almost judge then the waves of when we're attacking these the substantial levels And so at the moment this we still need to observe it Everything is still very close proximity to these key levels You just need one big order to come in to snap through one of these levels and then it could get quite interesting again Yeah, an interesting point as well I guess to keep in mind is that in the run-up to this release I was talking about the nature of the fact that the Bank of England or the Fed They would have they've kind of kept the language of data dependency and Wide essential banks do that they do that Because of the reason of then They have not pre-committed to a certain course of action far out in the future, which is highly uncertain So then if you say we're only going to react to however the data suggests at the time Well, then this data suggests the Fed should be hawkish And so again, hence the rationale behind the type of market moves that we've seen so You know Importantly and this comes then the test if the Fed's going to really live up to that credibility and be data dependent You probably are going to see a meaningful shift back to 75 But as I've said before there's a long time to go and a lot can happen Between now and then including another payroll report So that's not to say that a 75 is a shoe-in Just because of what we've just seen materialized But for sure the readjustments the recalibration in markets is what we're seeing in a in a short-term intraday reaction Yeah, in terms of the Canadian numbers The employment change minus thirty point six thousand Expected was for a plus 20k So big miss and their unemployment rate four point nine percent gets expected five Okay, just while I'm on few things if I may for one Don't forget to follow us on the various social media channels If you're new to the YouTube channel, don't forget to subscribe We put out videos live sessions things like that which definitely might be of interest to you if you're interested in markets There's the Amplify me LinkedIn my LinkedIn profile if you'd like to connect with me There's a new Podcast episode that is about to drop any moment that I recorded earlier this morning. 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I'd love to stay on all day But I got tons of other stuff I need to Tackle and definitely just keep an eye on the newsletter and stuff like that that will all go out At 5 p.m. Today as per normal, but yeah, thank you everyone for joining us Yeah, nice nice reaction. Actually pleasing if you're If you are observing Markets, it's always nice to see a bit of bit of market movement to give to finish things off then just to give you the market reaction So remember before we were going into the Fed meeting The split was 60 40 in favor of 50 basis points that split has now flipped And it is now 60 40 if not more leaning in favor of 75 Cool. All right, we'll wrap up there. Thanks everyone. Take care. Have an amazing weekend and Yeah, check out the podcast latest episode just recorded So hopefully you might find it a useful summation of the week and I'll see you next week