Weaker labor market numbers would mean less money in the hands of workers and salaried employees, which usually translates into softer consumer demand and lower demand-pull inflation. That would validate Warshs view, reduce the case for aggressive Fed rate increases and put real pressure on the U.S. currency.
With bullish positioning in the dollar and rates markets already lopsided, a soft payrolls report could trigger a sharp snap-back in the Dollar Index (DXY), giving bitcoin and gold a solid tailwind.
That said, if the numbers come in hotter than expected, especially on the wage side, the bounce could stall, fast. Stay alert!
Whats trending
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