Tight jobs
August 9, 2021
–Gold crashed last night, with GCZ falling to 1678, but it has now bounced $65 off the low and is trading 1743. The last time gold traded below 1700 was in March, when SPX was trading around 3800 (vs 4436 now). Crude oil is also under pressure, printing -2.87 at 65.41, fully ten dollars off last month’s high. Blame it on the delta variant. Or the bossa nova.
–A strong jobs report caused tens to jump 7.3 bps to 1.288%, with NFP 943k and Hourly earnings +4.0% yoy. Today features the JOLTS report. (Job Openings). Pre-covid the high in this series was 7.574 million in late 2018. After the plunge it’s now a record high at 9.2 million. I’m sure the tweet below is supposed to be funny… but it has a ring of truth: “Got a CV today and the guy literally listed one of his skills as ‘googling’. We’re interviewing him.”
–The $1 trillion infrastructure bill is closer to passage. A friend mentioned that he needed to buy a basic steel outbuilding for his business, and that the quote has gone from $19 sqft a bit over a year ago to $36 now. More gov’t inspired demand at a time when commodity prices are strong and labor markets tight, while delta causes fresh obstacles to supply chains in China. Gold is trying to tell us it’s deflationary? (or that USD is about to tear higher, or that someone needed to raise some funds fast).
–Gold eurodollar pack (5th year) surprisingly led the strip lower Friday, settling -7.75. Greens (3rd) were -6 and blues (4th) -6.875. This week the treasury auctions 3s, 10s and 30s starting tomorrow. CPI and PPI out Wednesday and Thursday.
