Macro Dragon WK #20: NFP Iconic Miss (-734k btw actual & estimate) Takes Pressure off Fed for Jun 16th Macro Dragon WK #20: NFP Iconic Miss (-734k btw actual & estimate) Takes Pressure off Fed for Jun 16th Macro Dragon WK #20: NFP Iconic Miss (-734k btw actual & estimate) Takes Pressure off Fed for Jun 16th

Macro Dragon WK #20: NFP Iconic Miss (-734k btw actual & estimate) Takes Pressure off Fed for Jun 16th

Macro 8 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Cross-Asset Quasi-Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.

(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

Macro Dragon WK #20: NFP Iconic Miss (-734k btw actual & estimate) Takes Pressure Off Jun 16th FOMC Meeting

Top of Mind…

  • TGIM & welcome to WK #20… where the start of the focus will be on last Friday’s US monthly job numbers…
  •  Our FX Specialist John Hardy’s initial take: Patience required after an NFP miss for the ages.
  •  As per the Dragon’s note to our VIPs on Fri (see mail below for those on the VIPs mailing list), going into the Friday NFP were expectations for 1m jobs, the risk was to the downside as there seemed to be a whisper number of an even bigger number, with estimates of 2m topping the high end of the range! So it felt that even 1m would have been ‘priced in’.
  • So when we got that massive miss at 266k a vs. 1000k e (-734k shortfall to consensus), plus downward revisions to 770k (-146k) on the previous months print of 916k (where we had a +50% beat) – we got some big moves on a cross-asset perspective.
  • With the USD massively on the back foot across currencies & commodities, as well as the DOW + S&P 500 breaking to ATHs. On equities, price action suggests that the rotation away from growth into value is continuing – at the very least a lot less demand for growth & tech it seems.
  • Just for some context on some of the moves for last wk:
  • EM FX Complex:  BRLUSD +3.89%, ZARUSD +3.20%, MXNUSD +1.88%
  • G10 FX Complex: SEKUSD +1.88%, AUDUSD +1.66%, NZDUSD +1.63%, EURUSD+1.20%, GBPUSD 1.17%
  • CMD Complex: Gold 1831 +3.51%, Silver 27.45 +5.91%, Copper 476.60 +6.41%, WTI 64.90 +2.08%, Brent 68.28 +1.53%
  • US Equity Complex: AirBnB 151.21 -12.45%, Palantir 19.75 -14.28%, Doordash 124.89 -12.45%, Amazon 3291 -5.07%, Tesla 672.37 -5.23%

    Then on value front…

    Exxon 62.43 +9.07% (breaking out higher), XLE 53.63 +8.58% (breaking out higher), Caterpillar 240.99 +5.65%, Deere & Co 394.22 +6.30%

    Worth noting Dow 34777 +2.67% & S&P 4332 +1.23% breaking out to new ATHs, while Nasdaq-100 13719 -1.02% is not. Its also worth noting that the latter’s chart is not looking that bearish & we could be retesting the 14,000ish resistance lvl soon.

    Lastly VIX closed down -10.32% to sub 16.69.

    • Yet perhaps strangest of all was the knee-jerk reaction in US10yr yields, first spiking lower to new weekly lows of 1.4643%, before reversing & closing higher on the yields of the day at c. 1.58% (still lower that previous wk’s c. 1.63%
    • So folks will be looking to separate the signal from the noise on NFPs, especially as we only have one more before now & the Jun 16 Fed meeting – which should be a forecast & estimates meetings. There is no doubt a structural element to parts of the workforce in the US not being incentivized enough to get back into the labor force – i.e. for them the stimulus benefits outweigh the pros of getting a job. As well as perhaps the recovery continuing to be more fragmented than thought, i.e. that was a big revised number. At the same time the jobless claims was lowest since the pandemic kicked off. And we also know that from a structural perspective, that the benefits could run into Sep 6th.
    • Hard to see how some of this can be short circuited, but there are already some states - Montana & South Carolina citing labor shortage - cancelling access to federal $300 weekly unemployment payments. Those effects are likely to come through already in Jun & if mirrored elsewhere in the US, could see some structural uplifts on the job markets in the May, Jun & Jul NFPs.
    • Bottom line, from a high probability perspective – the Fed has gained wiggle room to delay any moves on signaling steps to taper, hike, get more hawkish, etc. KVP is currently just not sure how much of that may be delayed until Sep or 4Q, or if they may already start to signal quicker moves in Jun. The clearer picture would have been if we got +2m jobs last Friday. Yet it does seem to be less about direction (IF) & more about timing (When) in regards to a more hawkish Fed, inflation coming through & jobs flying back.
    • And of course, if one has the view that, that NFP was going to be the worst number & they only get better (i.e. higher), then it feels like the most contrarian thing for one to do right now in this market is:
      • Go long the USD vs. other DM & EM Currencies
      • Go short UST bond futures, as well as Gold
      • Go long growth stocks & tech names, vs. show value-linked names
      • Play for a more pivotal ‘hawkish pivot’ move from the Fed in Jun  
      • Play for a deflationary skew, from the context that the inflation theme is a touch overstressed & we could see a sharp near-term reversal in commodities which are either at ATHs or close to ATHs


    2Q SaxoStrats Outlook


    Rest of the Week & Other Reflections

    • Outside of US jobs data digestion, folks will be focusing on the US Wed inflation reading where 3.6%e 2.6%p on headline & 2.3%e 1.6%p on Core. There are also JOLTS job opening (which should continue to rise aggressively, if the labor shortage stories are true), retail sales & industrial production also out of the US. There are also US bond auctions on both 10s & 30s.
    • China will see inflation, PPI & New Loan data. EZ will see regional CPI, EU Economic Forecasts & German ZEW. Australia has their annual budget & retail sales due.
    • Earnings wise – we have done well over +400 of the companies in the S&P 500. Yet this week could see a few interesting earnings due including:
      • Mon: Roblox [RBLX], BioNTech [BNTX], WEIBO [WO]
      • Tue: Palantir Technologies [PLTR]
      • Thu: Alibaba [BABA, 9988], Airbnb [ABNB], Disney [DIS], Coinbase [COIN], Doordash [DASH]
    • Covid-19 & Re-opening wise – we continue to see divergence with adjusted restrictions &/or tick up in infections in places like Singapore, Australia, India… yet potentially we’ll see a divergence in the likes of the UK which should announce an easing of restrictions for next wk.
    • CBs: Rate decisions that are expected to remain unchanged out of Philippines 2.00%e/p, Chile 0.50%e/p & Mexico 4.00%e/p  
    • Fed: Evans later today on a digital conference, as well as host of other FOMC members later in the wk including Williams, Brainard, Daly & Bostic. We also have Clarida due later this wk.
    • BoC’s Macklem set to speak on Thu – interesting to see just how blazingly strong CAD has been vs. the USD. KVP is also hearing parts of Vancouver Housing market is seeing double digit gains in just the last few months.     
    • Hols: Some European countries out over Thu & Fri this wk.   
    • Dragon Interviews U-Tube Channel for easier play-ability…


    Start<>End = Gratitude + Integrity + Vision + Tenacity | Process > Outcome | Sizing > Position.

    This is The Way



    Quarterly Outlook 2024 Q2

    2024: The wasted year

    01 / 05

    • Macro: It’s all about elections and keeping status quo

      Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.

      Read article
    • FX: The rate cut race shifts into high gear

      As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.

      Read article
    • Equities: The AI and obesity rally is defying gravity

      Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.

      Read article
    • Fixed income: Keep calm, seize the moment

      With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.

      Read article
    • Commodities: Is the correction over?

      Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.

      Read article


    The Saxo Group entities each provide execution-only service, and access to analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular, no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

    Trading in financial instruments carries risk, and may not be suitable for you. Past performance is not indicative of future performance. Please read our disclaimers:
    Notification on Non-Independent Investment Research (
    Full disclaimer (

    None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

    Saxo Markets
    88 Market Street
    CapitaSpring #31-01
    Singapore 048948

    Contact Saxo

    Select region


    Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

    Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

    The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

    The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

    This advertisement has not been reviewed by the Monetary Authority of Singapore.

    Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.