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Welcome to 2017 – Denouement

Sunday, January 8, 2017 16:04
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BarroMetrics Views: Welcome to 2017 – Denouement 

Well, I was wrong about the Non-Farm number. It came in at 156K (just above the lower end of consensus {151k to 210k}). But, then why did the USD rally?

For the second month in a row, rather than raise the Non-Farm Payroll number, the US Bureau of Labour Statistics reported a massive 4% rise in average hourly rates.

This was the second consecutive “outsized 0.4 percent rise in average hourly earnings….. The year-on-year rate is now at 2.9 percent which is a cycle high. A 3 percent rate and above is widely seen as feeding overall inflation.” (NASDAQ Economic Calendar).

So, the 4% had the same effect as an above average consensus Non-Farm number.

Let’s see if we see a continued USD rise today.

The S&P gave a clue to the answer I am seeking. We saw a strong rally. If we see another rally today, I’ll have to put aside my long-term misgivings and go with the price action.  The upmove on Friday, in the face of a Non-Farm suggesting an interest rate hike, indicates we are in the initial phase of a growth cycle rather than in a terminal phase – the Trump election was an ‘unexpected event’ rather than a ‘surprise’.

The post Welcome to 2017 – Denouement appeared first on Ray Barros’ Blog for Trading Success.


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