Every month jobs seem to come in as expected—with downward revisions!
highlights
A date for your radar and quick jobs comment
Current Views
Long 1-week 149.50 USDJPY call
Cost ~30bps expires 05AUG
Spot ref. 148.75
Delta hedged, gamma trade now
Long 26AUG 1.8050 EURAUD call
Cost ~36bps Spot ref. 1.7790
Long 26AUG 0.8760 EURGBP call
Cost ~33bps Spot ref. 0.8680
Global trade has been reshuffled
Welcome to the new global trading order.
Something that is not on everyone’s radar, but should be, is the August 12 deadline for the China/USA trade truce. While the market has not really cared about trade and tariff headlines, there is still a possibility that the 90-day truce agreed by China and the US could end if Donald Trump so chooses.
The headlines from Bessent and Greer, while positive(ish), did not provide maximum reassurance. If Trump is angry about Chinese buying of Russian oil, he might use the tariffs as a way of sending that message. A resumption of maximum friction between the US and China would probably matter.
This is especially true as we enter the seasonal period where risky assets tend to be fragile, just after a euphoric rip higher into maximum greed territory. Yesterday’s epic reversal in the NASDAQ also raises the stakes into next week.
The bond market is not providing any safe haven status, either, as inflation remains sticky above target. Imagine if they did symmetrical flexible inflation targeting! They would need to be hiking aggressively to get inflation down to 0% in an effort to achieve a 2% average over whatever lookback.
Jobs
The jobs reports continue to do the same thing over and over. Near expectations with monster revisions. The downward revisions story started in November 2022 as you can see in the chart, so I am not sure they are a harbinger of much at this point. Economists with a bearish worldview will highlight the revisions but they were a red herring in 2022, 2023, and 2024. I am not sure they are meaningful now in year 4. I can tell you one thing: Waller will be talking about them!
The USDJPY trade
It’s pretty much a gamma trade now as I hedged as explained yesterday. Expires Tuesday. We are back below the strike and now I am hoping for one more shot early next week. Next week’s calendar (below) is boring, with the exception of the Bank of England meeting and maybe Kiwi jobs.
Final Thoughts
I like to try to keep things short on Friday. If you want more, here are two good reads, one longish one super short:
https://sherwood.news/markets/the-ai-spending-boom-is-eating-the-us-economy/
And finally: Figma went public yesterday and trades at 56X sales vs. Adobe at 7X sales. Ok.
I am surprised stocks can’t rally on this number.
Have an average weekend.
Trading Calendar for the Week of August 4, 2025
Averages are not always meaningful.
