The nonfarm payroll is a key focus, not only for the Federal Reserve; here is an interesting preview from Citi.
In (very) brief:
Last month we put out a piece explaining the tendency for poor initial prints (not final) for NFP in September periods suggesting that a sub 150k number was very likely. We got lucky, and of course as a consequence we are "pushing our luck" by making a few observations this month that suggest:
- a good chance of An upward revision of the Sept number to around +186k
- An October number just above +200k
The report is from Citi Technicals, and they go on:
If lightning strikes twice and we are correct, we suspect the market will really begin to believe that a December move by the Fed is a very likely outcome.
This would be supportive of the USD, likely give us our first weekly close on 2 year yields above 75 basis points and while maybe give some short term jitters on the Equity market likely then give way to new all-time highs before the December Fed meeting. (This is pretty much exactly what happened in the S&P in 2013 when the Fed chose not to taper in September and then moved in December. The high for the year in 2013 was posted on Dec 31st.)
