Markets Rally on Yellen’s Temperate QRA and Balanced FOMC Outcome🤔
Santa Claus appears to have arrived early this year, nearly 2 months early.A much more benign QRA (Quarterly Refunding Announcement) from Yellen, a balanced FOMC, and a below-consensus print on NFP struck an old-fashioned 'risk-on' rally across all asset classes. Equites higher (+1.5%), bond yields lower (-15bp on 2s), DXY sell-off (-1.1%), IG CDS tightening (back to Sep lows), rate cuts back in the picture (1st cut 1Q24), crypto prices held in (BTC >$35k, ETH +2.3%), and even SBF saw a swift guilty verdict after just an expedited trial.US NFP increased 150k in October, worse than consensus estimates with a negative -101k revision to the previous 2 months as well. The unemployment rate moved up to 3.9% while AHE fell to 0.2%, with the YoY rate dropping from t.43% down to 4.1%, the slowest since June 2021. The autoworkers strike subtracted 33k from the jobs gain, while private hiring was dragged weaker from manufacturing. Later on, ISM services came in at a lacklustre 51.8, greatly missing expectations, and adding fuel to the fire over the dovish rate outlook. A sharp drop in the employment component (-3.2 pts) and new export orders (-14.9)
