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Traders hedge for strong U.S. jobs report
Thu Mar 3, 2005 07:23 PM ET
NEW YORK, March 3 (Reuters) - Hedgers and speculators on Thursday braced for a stronger-than-expected February U.S. payrolls report, according to an economic derivative auction.
The auction showed an implied market forecast of a 235,200 increase in U.S. payrolls outside of the agricultural sector, up from a 146,000 increase in January, and slightly above the median forecast of 220,000 by economists in a Reuters poll.
The distribution of positions showed a large cluster of players ready for a much stronger-than-expected report, but also a large cluster of players ready for a slightly-lower-than-expected increase.
The U.S. Labor Department will release payroll numbers on Friday at 8:30 a.m. EST (1330 GMT). The second of two February payrolls economic derivatives auction will take place earlier on Friday.
A strong payrolls report on Friday seems plausible after the Institute for Supply Management said on Thursday that employment in the services sector, which accounts for about 80 percent of the U.S. economy, expanded at its fastest rate in February since the group began keeping track in 1997.
About 10 percent of auction participants, weighted by the size of their positions, are ready for a payrolls figure between 275,000 and 300,000, and another 11.5 percent are ready for a number above 400,000.
But 10 percent of participants are ready for a payrolls figure between 175,000 and 200,000.
Economic derivatives, offered by Deutsche Bank, Goldman Sachs and interdealer broker ICAP, have a good history of showing how markets are positioned ahead of important economic figures, compared with the forecasts of economists.
Thu Mar 3, 2005 07:23 PM ET
NEW YORK, March 3 (Reuters) - Hedgers and speculators on Thursday braced for a stronger-than-expected February U.S. payrolls report, according to an economic derivative auction.
The auction showed an implied market forecast of a 235,200 increase in U.S. payrolls outside of the agricultural sector, up from a 146,000 increase in January, and slightly above the median forecast of 220,000 by economists in a Reuters poll.
The distribution of positions showed a large cluster of players ready for a much stronger-than-expected report, but also a large cluster of players ready for a slightly-lower-than-expected increase.
The U.S. Labor Department will release payroll numbers on Friday at 8:30 a.m. EST (1330 GMT). The second of two February payrolls economic derivatives auction will take place earlier on Friday.
A strong payrolls report on Friday seems plausible after the Institute for Supply Management said on Thursday that employment in the services sector, which accounts for about 80 percent of the U.S. economy, expanded at its fastest rate in February since the group began keeping track in 1997.
About 10 percent of auction participants, weighted by the size of their positions, are ready for a payrolls figure between 275,000 and 300,000, and another 11.5 percent are ready for a number above 400,000.
But 10 percent of participants are ready for a payrolls figure between 175,000 and 200,000.
Economic derivatives, offered by Deutsche Bank, Goldman Sachs and interdealer broker ICAP, have a good history of showing how markets are positioned ahead of important economic figures, compared with the forecasts of economists.
