Friday will bring nonfarm payroll data from the US – Goldman Sachs preview

Goldman Sachs were very close to the money indeed for jobless claims.

I posted yesterday:
  • US Jobless claims data due Thursday – Goldman Sachs forecasts 5.25m
And then, prior to the data they boosted their forecast:
  • Goldman Sachs raises US weekly initial jobless claims forecast to 6 million, from 5.25 million previously
Note that this NFP report is unlikely to be instructive, the survey was mainly before the big impact of the coronavirus outbreak on the economy. Over to GS’ comments:
  • estimate for nonfarm payrolls is a decline of 180k in March
  • unemployment rate up 0.3 to 3.8% … risks skewed towards a larger increase
  • the March employment numbers are already fairly stale and insignificant in our view, because the April report will likely show job losses in the millions.
Goldman Sachs were very close to the money indeed for jobless claims.

Goldman Sachs says the yen is undervalued – downside risk to 103 target

Via a Goldman Sachs note, says yen remains cheap, unlike many other safe havens

  • positive news out of the US-China meeting could weigh on yen in the near term
  • but its role as a portfolio hedge bodes will continue
Downside risks to GS’ 12-month USD/JPY target (at 103)
  • proprietary models set 95 as fair value
  • bullish yen view supported by BOJ having limited monetary policy space to ease further
  • net outflows from Japan have shifted to “cross-border direct investment from portfolio flows, and outbound foreign direct investment could pull back on global trade uncertainty”
  • trade disputes
  • unsettled global markets
may lead to a choppy USD

Gold 75% Underowned In 20 Years, Or Exter's Pyramid For Gen X/Y

Kedrosky has posted an informative chart from JPM’s Michael Cembalest indicating that ownership of gold in dilutable terms (aka dollars), as a portion of global financial assets has declined from17% in 1982 to just 4% in 2009. And even thought the price of gold has double in the time period, as has the amount of investible gold, the massive expansion in all other dollar-denominated assets has drowned out the true worth of gold. Were gold to have kept a constant proportion-to-financial asset ratio over the years, the price of gold would have to be well over $5,000/ounce.

Of course, the chart above pales in comparison with the true Exter pyramid, which incorporates all those wonderful JPM/Goldman inventions known as derivatives, amounting to $1.8 quadrillion, which certainly did not exist in 1982. If one were to factor the above table  to include this Exter securitized credit money as well, then the true constant worth of gold would be well north of $10,000.

Dutch Bank Algo Blamed For GBP Flash Crash

Another rogue algo takes matters into its own binary hands. Time to institute circuit breakers for the tiny FX market, which alone celebrated Obama’s latest set of oratory delight by flash crashing all on its lonesome…

From Goldman’s Mitesh Parikh:


GBP – what just happened

To save being asked anymore times – the short answer is I honestly don’t know.. 1.5290 – 1.5168 between 7.56am and 7.57am.. unlikely it was for a fix (that would make sense if closer to 8am), and price action doesn’t suggest a mis-hit since it was ‘walked’ down over the course of the minute albeit exceptionally aggressively (not everyone executes as subtly as we do… no comments please!) We saw Dutch interbank names selling aggressively towards 1.5200 with some suggestion that their algo blew up from a few market sources, although we can’t comment on the validity of this.  Needless to say the market has corrected, cable is back above 1.5300, cross now sub 0.8430 , exactly where we started.

John Taylor Of The World's Largest Currency Hedge Fund Sees Euro Dropping To $1.20 By August

John Taylor, chairman and chief executive officer of FX Concepts LLC, the world’s largest currency hedge fund, sees the euro dropping to $1.20 by August, and believes parity is possible. Be very careful, because as of today Goldman is now accumulating euros (as per its just released Sell recommendation). More from Taylor: “It’s going to be quick because things are really falling apart…. Some of these [countries] have to be thrown out [of the EMU]. If you look at a country like Latvia, which has been effectively in the Euro, has been saved by the European Commission and the IMF much like they are suggesting Greece will be, their retail sales were down 30% last year, the GDP was down 18%, it is expected to drop another 8% this year. Latvians are starving, the place is a disaster area: that’s what you have to go through to be a part of the Euro.” On whether his firm has felt any political pressure on putting on bearish euro bets: “None at all. We are SEC regulated and the information is there, but nobody seems to be caring.” Lastly, Taylor ridicules the WSJ story about the restaurant-based collusion: “Yes, they had a meeting and talked about how bad the euro was. But that they in fact had some impact: their assets are 1% of the daily volume. Somebody like us, we have a bigger position against the euro than those people put on.” Taylor says in the next three to six months, the dollar will be strongest against the euro, and Eastern European currencies. In a longer horizon, he says to be long Asia and short the euro. Bottom line: sell Europe, buy everyone else. And join the bandwagon… Just as Bernanke prepares the dollar’s next suicide move with inflation obviously not working.

Job Losses Accelerate


Good morning. The long-awaited jobs report is out and it came as worse than expected (as Goldman predicted). 263,000 jobs were lost and unemployment rate came in at 9.8%. Futures were trading lower ahead of the report and have stayed that way since.

Other news include the World Bank’s warning of a wobble ahead for the global economy, a strong dollar is very important to Geithner, Bernanke suggests a Board of Regulators, Meredith Whitney says small business credit crunch continues and Comcast & NBC are apparently in deal talksAt 10:AM we have Factory Orders for August and news of the Chicago Olympic Bid will also come out today between 12:30PM to 1:PM EST.

Already this fall I had expected and written to have cautious approach.Now just will watch S&P 500.Below 1031 will take to 1014-1009 level and there after retest of 991 level.

Will update more about DOW ,Nasdaq Compostite and S&P very shortly.

Iam personally Bearish for Stocks/Commodity from last 15 days and will not buy anything.

Technically Yours

Anirudh Sethi



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