RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

A stellar NFP jobs number was reported this morning, showing an increase in payrolls to the tune of 250K vs an expected 200K in October. Wage growth was what many traders were focusing on and that expressed a 3.1% y/y reading better than the expected 3.0%. The USD is bouncing back slightly from yesterday’s smack down and looks as if it may actually finish out the week in the red. Thus far, it has been a rather feeble attempt at a rally in the dollar if you ask me. Is this the beginning of the end for the Dollar?  Maybe, maybe not, but our call has been that the USD has more risk on the downside as we wade thru the slowing of the U.S. economic cycle. We were bullish on the dollar back in the spring and through the summer (I’ve got the time stamped emails to prove it), as there was big flight of capital out of emerging markets, European, and Asian currencies as they’re cycles were breaking bad. That left the USD as the only safe haven instrument in the currency space – Remember the U.S. economy was still in an expansion cycle in GDP/Inflation/ and Corp profits and earnings. Looking forward, the dollar looks to have direct competition for its “flight to safety” status, in the likes of gold, fixed income via treasuries, eurodollars, FF futures etc, (although the rallies have been shallow, we think that’s going to change) and utilities – not to mention when the Q4 data begins to be reported “less good” on a y/y basis – and perhaps the Fed takes it’s foot off their “hawkish” stance on interest rate policy, which we also think is a likely scenario. 

U.S. Dollar Index Weekly Chart

U.S. Dollar Index Weekly Chart

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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