UST Traders Plan to ‘Do Nothing’ Following Jobs Report: BMO
(Bloomberg) -- Most notable feature of monthly survey was how “agnostic” the market is headed into Friday’s jobs report, with respondents indicating an above-average willingness to “do nothing” should there be a selloff or rally, BMO strategist Ian Lyngen said in a note.
- If market trades lower following Oct. jobs report:
- 10% sell vs 13% avg
- 44% buy vs 48% avg
- 46% do nothing vs 40% norm
- If market trades higher following jobs report:
- 12% buy vs 16% avg
- 29% sell vs 38% avg
- 59% do nothing vs 46% norm
- 46% of survey participants expect the next 15bps in 5Y UST yield will be higher, while 36% say lower; 16% don’t know; 31% see norm
- On other questions:
- Answering what it would take to derail Fed’s planned December hike, primary answers were: nothing, a stock-market correction, war with North Korea, a govt shutdown, or much weaker NFP/CPI prints
- In what scenario the term-premium might increase, “the overwhelming answer was when inflation comes back”
- Odds of a full Nafta breakdown averaged 28%
To contact the reporter on this story: Katherine Greifeld in New York at kgreifeld@bloomberg.net To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net Vivien Lou Chen
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HALISTER1Source: BFW (Bloomberg First Word)
People Ian Lyngen (Bank of Montreal)
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