Expectations
for NFP is lower than previous which may give some breath to precious metals
but stocks traders will be in dilemma but Bill Gross says inflation matters not
unemployment if you’re on the wrong end of
an interest rate teeter totter headed up, it makes you wonder why anyone would own bonds or at least why anyone would
own longer-term bonds," writes Bill Gross (BOND) after closing out a rough
2013. "That question and its answer are the key for 2014."Stop worrying so much about
that number coming out on the first (occasionally 2nd) Friday of each month, he
says, as inflation, not unemployment will be the critical statistic for gauging
Fed policy going forward (the PCE is release around the 20th each month). There
will be no policy hike until both unemployment
and inflation breach their thresholds, says Gross, and they're not even
thresholds; "they're forks in the road that may, or may not lead in a
different direction." At the moment, annualized PCE inflation of 1.2% is
nowhere near the target of 2%.Gross isn't calling for a bond bull market, but - if he's
right about inflation - it will be realistic to expect positive fixed income
returns in 2014.
Following are trade calls for today,
- Buy Cad/Jpy at 96.50 stop below 95.80 target 97.40
- Buy SnP at 1836 stop below 1826 target 1847
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