Payrolls!
February 7, 2025
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—Payrolls. NFP today expected 175k from 256k last. I’ve seen some higher estimates. Private payrolls expected 150k from 223k. My personal bias regarding TY and US is that a strong number will be met with dip buyers, while a weak number could cause a powerful rally. In TY I suspect the week’s low at 108-20+ will hold, while on the upside I would target 111 to 111-16. 50% retrace on continuous TY from Sept high 115-07 to Jan low 107-07 is 111-07. (last at 109-19). Consumer credit released at end of the day.
–A few large SOFR opts trades: +50k SFRM5 9612.5/9637.5cs 2.5 vs 9588 and 88.5 with 10d. Settled 2.5 vs 9589. A few sessions ago there was a buyer of 40k same strike April call spread for 1.75. Also a buyer SFRU5 9662.5/9762.5cs WITH 0QU5 9712.5/9812.5cs paid 12 for 10k of each. All new positions. SFRU5 cs settled 5.75 vs 9601 in U5, and 0QU call spread settled 6.0 vs 9614.5 in U6. Currently SFRU6 is the highest point on the SOFR strip.
–In early 2019 after SPX had dumped 20% in Q4 2018 and Powell hiked for the last time in Dec 2018, there was a ton of call spread buyers every day in SOFR. It’s almost starting to feel a little bit like that. I don’t quite understand the catalyst. Stocks are holding near record highs. Data remains generally firm. Powell et al have indicated they are comfortable holding rates steady. However, the flows support the idea of lower rates, in my opinion.
–2/10 spread at futures settle was 23, a new low for this year (2025). This morning prints 20.5 which is the halfway back point of the recent surge, 0 on 25-Nov to +42.3 on 9-Jan.
–Attached chart is the stock of Almonty, the largest tungsten miner in N Amer. China’s tariff retaliation includes export controls on tungsten, of which China is, by far, the largest producer. Used in many industrial applications. Supply chain issues resurfacing?
Interesting article:
“We instantiate this network inside the camera lens with a nanophotonic array with angle-dependent responses. Combined with a lightweight electronic back-end of about 2K parameters, our reconfigurable nanophotonic neural network achieves 72.76% accuracy on CIFAR-10, surpassing AlexNet (72.64%), and advancing optical neural networks into the deep learning era.”
Well, when you put it that way, it’s pretty obvious, isn’t it? I wonder if it requires tungsten.
https://interestingengineering.com/innovation/new-camera-identifies-objects-200x-faster
