Quarterly Outlook
Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Access both platforms from your single Saxo account.
NFP report : Another danger signal for the US economy
Christopher Dembik
Head of Macroeconomic Research
Summary: The latest ADP, which rose only 27k, was the first very worrying signal regarding the US labour market this year. The payrolls for May that have just been released tend to confirm that the jobs market is indeed facing negative pressure.
It's a big miss: nonfarm payrolls headline number rose by 75k versus 175k expected, which is way below the 3-month modified moving average (standing at 150k). This is the second time this year that NFP came in under 100k. On the top of that, both March and April jobs growth were revised downwards by a total of minus 75k, which makes the miss even worse. Last but not least, hourly earnings growth is slowing at 3.1% versus prior 3.2%.
Usually, when we are approaching the end of the cycle, we should not focus so much on the unemployment data as they are both lagging and contrarian indicators. However, this big miss will obviously reinforce the market view in favor of rate cuts (odds are above 70% for July Federal Open Market Committee meeting).
The Fed is in a corner, as economic activity is showing signs of weakness and it is pushed to move towards “insurance cut”. Nonetheless, such a move will be interpreted by market participants as panic cut, meaning they will expect more cuts to come as the outlook is getting gloomier.
We are heading towards a global policy reversal, with high expectations that the Fed will cut rates by 50 basis points by October.
Usually, when we are approaching the end of the cycle, we should not focus so much on the unemployment data as they are both lagging and contrarian indicators. However, this big miss will obviously reinforce the market view in favor of rate cuts (odds are above 70% for July Federal Open Market Committee meeting).
The Fed is in a corner, as economic activity is showing signs of weakness and it is pushed to move towards “insurance cut”. Nonetheless, such a move will be interpreted by market participants as panic cut, meaning they will expect more cuts to come as the outlook is getting gloomier.
We are heading towards a global policy reversal, with high expectations that the Fed will cut rates by 50 basis points by October.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity
John J. Hardy
Global Head of Macro Strategy
After the chaos of Q2, the quarter ahead should get a bit more clarity on how Trump 2.0 is impacting... -
Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ... -
Quarterly Outlook
Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever
Jacob Falkencrone
Global Head of Investment Strategy
-
Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy