Weekend wrap: FED voters comments and NFP
The last half of the week was plastered with hawkish comments from several FED voters making it clear that their hawkish stand was not about to shift just yet. This reversed the buy-it-all rally and higher than expected NFP fueled this tendency further. There is however a feeling on the market, in data and in FED comments that something is happening in terms of slowing down the inflation and thus relaxing the FED’s hawkish stands somewhat. The NFP did not expand as much as in the last report, wages did not increase more than expected, we did have some data points this week pointing towards slowdown as well, such as the PMI numbers.
The difference today between NFP and expectations were not to big, but we did manage to do a successful short trade in EURUSD:
We are holding on to a call option for XAGUSD mainly because of the risk of Russia of using or testing (read: warning with) weapons of mass destruction but also due to the trend in silver and the possibility of more data points showing weaknesses in the US economy.
What’s also worth to note is the decrease in put options sold for equities this week. Another indicator that more begins to think there’s at least a pause in the sell off.
Next week eyes will be on the 20 first earnings reports, which could initiate some volatility. For more key events to macro trade on please view our calendar.