The big event is going to be the return of official US data

More Epstein aside, the big event is going to be the return of official US data. We will get a new schedule from the BLS later today. Expectations are running high that a new nonfarm payrolls will confirm what private outfits are saying—job growth stalled and is maybe reversing. The White House said data on jobs and inflation will not be released. Here  comes another court case.

Talk of the Fed having second thoughts about the Dec rate cut is just that, talk. Reuters buys it, reporting “Fed futures pricing for a December rate cut is now little more than 50-50, with regional Fed officials on the central bank's policy committee signaling a pause until the foggy data picture clears up. The September national payrolls report may hit as soon as next week, but there aredoubts about whether October jobs and inflation numbers will ever be released due to data collection issues.

“Boston Fed boss Susan Collins, a voter on the FOMC this year and considered a 'centrist', was the latest to sound a note of caution. ‘Absent evidence of a notable labor market deterioration, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown,’ she said.”

A big offset is Trump lackey Miran’s view that the data has been misleading and rates need to be cut.  Atlanta Fed Pres Bostic (not a voter), “strongly suggested he will argue against a December rate cut, downplaying labor market softness and emphasizing inflation threats.” If you like detailed analysis from veteran Fed watcher Beckner.

We get viewpoints from another three Fed members today.

For what it’s worth, we tightened the channel on the 10-year yield chart. The linear regression for end of the week would be well under 4%. The US auctions some longer-term Treasuries today, 10 and 30-year. Stay tuned. Participation is expected to be just fine.

Forecast

Gold continues to recover. Risk-off must be in play. Bitcoin continues to slide south. Risk-off must be in play. But US and many world equity indices are at or near all-time highs and VIX has retreated from the mind-Oct high, so when it comes to equities, we can’t validate risk-off is in play, if a bit rocky around the big tech edges.

If history is a guide, the US economy will recover quickly and fully from the shutdown. We could still get a nice Atlanta Fed GDP Now tomorrow somewhere in the stratosphere of about 4%. The Atlanta Fed has been gaining ground in recent years as a barometer, if usually overshooting a bit. Anyway, it’s the next estimate we get on growth and assuming the usual robustness, another reason to project a gain in risk-on. So is the dollar risk-off because of Trump and lousy growth or risk-on because of good growth and to hell with jobs? The chatter about the Fed not cutting in December suggests risk-off, but that can mean flight to safety—in the dollar.

This is confusion as tangled as it gets, Check the chart, and especially the euro/dollar, the central component of the dollar index. The euro is on a downward correction. It will take an Event to reverse it. Hard truths.

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