US Jobdata, Inflation and China
US job data surprised to the upside with NFP going much higher than expected (+261k vs. +205k expected). At the same time the participation in the jobmarket turned and increased the jobless rate to 3.7 % versus 3.5 % expected. This lowered yields and instruments such as XAGUSD increased by more than 5 %.
We took action on this and sold both a XAGUSD call-option and a spot position. At the same time we bought a XAGUSD put-option with 5 days left and strike at 20.25 USD. We are middle and long term bullish on precious metals but expect a pullback on shorter terms
Our opinion is that we are at “the turn” where inflation is on to ease and therefore also where central banks will begin to ease their QT.
On an interesting note the market seems to continue to believe that Chine are to ease on its Zero Covid Policy fueling further increases in commodities, Chinese equities etc.
Trade safely and have a nice weekend.
