Much anticipation that a good number today give a green light for the Fed
Is it really as simple as that? Well Yellen has definitely made it clear recently, again, that the FOMC decision/timing on rate hikes will be data dependent so a good number today gives her little wriggle room/desire to get out of it before next Wednesday.
Conversely though just how bad a number today will mean she delays for another month or two ? That for me is a key question but one for which, as a mere mortal, I have no answer. Throwing it out there anyway for consideration. Only Yellen and the FOMC know what they need and the rest of us will continue to second guess.
So for today's NFPs I'm not going to try and find my long thrown away crystal ball or polish up my runes as regular readers will know by now. Why gamble hard-earned cash on a prediction/coin-toss ?
There will be plenty of chance to jump in on/after the release at 13.30 GMT and with large option expiries today also at 15.00 GMT there will be other forces at work beside the data.
FWIW I'm going for a disappointing figure and my jury is still out on a rate hike next week anyway. Even if we do get one surely it's factored in ? The real bullish tones will kick in only if the Fed accelerate the pace of subsequent hikes which I also doubt. Remember the BOE only really wanted to raise rates a couple of years or so ago because they wanted some wriggle room to play with in cutting again knowing that another crisis could well be on the cards.
The fact that they didn't/couldn't hike could be a timely lesson to the FOMC and my guess is that their interest in hiking is as much precautionary as it is to stem growth/inflation and "normalize."
If I'm wrong and today's number is strong then I have my core GBPUSD short to take advantage with and I'll be happy to sell a USDJPY rally around 116.00 or sooner if it runs out of steam.
Not long to wait now but remember, as always, ours is not to reason why. Ours is just to sell and buy.