Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Squawk / 04 May 2016 at 13:17 GMT
Chief Economist & CIO / Saxo Bank
Recession risk is rising with big allocation implications - today's ADP report is the worst in three years! Add to this that the Fed's broad based employment index (# 19 data points) is also making new lows and we have potential for a dramatic change in MAIN MACRO concern: I.e: concern will be recession risk

Classic economic theory reads that when the labour market turns sour so do markets

Add to this: economic data ALREADY has been weak for a long period - unlike EUR which is doing "better than"

This means that we have overweight in US fixed income - trade was done FOMC meeting in this link:

Action: If nonfarm payrolls on Friday confirms today's ADP number then we could start a big move towards NEW LOWS in US yields.... this would also help EURUSD and gold higher, but the main move would be in fixed income where the market is net SHORT
Vitor Oliveira Vitor Oliveira
Thank you! Maybe another trading opportunity in the cards. On the other hand, since we have US elections, this article deserves some attention imho >


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