Election and FOMC Preview

Election and FOMC

I hope everyone is having a nice weekend. We actually had quite the volatile weekend ahead of the big events this week, so we will dissect it all.

We have 3 key events for this week: Election, FOMC and China NPC meeting. The latter can actually be quite impactful for areas like commodities and risk sentiment so we will pay attention upon the release of fiscal news, but will not cover it in here.

Quite the price action on Friday with the NFP. I got this both right and wrong at the same time! In last week’s weekly, I posited that the print itself would be asymmetric, with a weak print mostly overlooked and a solid print causing a major bond selloff, and this view turned out correct. However, I got the read through from ADP to NFP wrong, and suspected that the ADP print would point to a major upside surprise, but I misread the signal from ADP. ADP covered the entire month, so it had hurricane impacts both come and go before the print, whereas NFP is the survey week of the 12th and thus was heavily impacted by the hurricane. I’ll take being right about the market reaction over the data itself anyday, but for a detailed breakdown of the NFP print, see my note on Friday: NFP Recap.