A Few Quick Thoughts

I don't really have time to post much but this is what I am thinking about heading into the "all important" jobs report - as those talking heads on CNBC would say.

• The reaction to the jobs report later today will be important. If the number is exceptionally weak, which the claims numbers may be telling us, we could see a dozy of a number and a big fall in stocks. It is the response that is key. If we rally on the bad news, look out shorts!
• Last week in my policy review note, I said that the ECB was now tight with policy. That was before I went back and changed my inflation variable and plugged in the flash estimate from this morning: 4.1%! This now implies that the ECB needs to hike 2 more times to just even out policy - probably more than 1% to slow inflation which at this juncture could plunge the EU into recession (I am looking for 1.8% growth).
• Speaking of recessions, the UK appears to be headed for a really bad one. Sure the US is weak but the UK market is falling harder and is something to watch as this may torpedo the Pound.
• The 1275 level in the S&P is important to me. We need to close above it on the weekly chart to keep hope alive for a rally towards 1300.
• My overall view on rates has become more neutral of late. The 2 year is getting a bit spunky which tells me a) traders are now worried about hikes or b) traders see growth. We'll know more after the report tomorrow.
• What am I doing up this late?

Good night (or early morning).