I’ve used this analogy before, but it seems appropriate, so I’ll dust it off again. Back in the days of the Cold War, military analysts would talk about having enough nuclear weapons to be able to “make the rubble bounce” by pounding a target to the point that there was nothing left but debris.

The global economic news of late is so dire that traders seem to have tired themselves out selling stocks and buying bonds. Stocks have had an oversold bounce the last two weeks and we could see a continuation of that pattern tomorrow unless the employment is exceptionally bad. “Whisper numbers” as large as 500,000 jobs lost in November have been making the rounds this week so anything near the consensus for a loss of 350,000 should be greeted with relative calm.

Since the US dragged the global economy into recession, it is hard for traders to sell dollars profitably on weak US data knowing full-well it is just a matter of time before the weakness makes itself apparent overseas.

Focus on the macro trade tomorrow: If equities do better after the numbers, expect risk aversion to lessen. If they tumble, we’ll test lower early on. After the knee-jerk reaction to the number is out of the way, the guessing game will turn to how much quantitative easing the Fed will need to do and what the impact of that ease will be on the dollar. It is far from clear, at this stage, though I have a guess that near-term it will be a mild dollar negative.