This morning’s better than expected weekly US jobless claims report finally got the Bombed Out Buck to make a consequential move to the upside.
At 502,000 claims, this week’s print was both better than last week’s (514,000) and below the 4-week moving average (see chart below). What matters most to our macro model is what happens on the margin. On the margin, this is Buck Bullish!
Our risk management process takes one of 3 positions on a market: Bullish, Bearish, or Not Enough of one or the other.
Is this weekly claims report Bullish Enough to get the US Dollar to move above our immediate term TRADE line of $76.20?
We don’t think so. Not yet. Until we get comfortable with making a call that last month’s 10.2% unemployment rate was a cycle peak, I am not going to go there.
Employment is a lagging indicator. But this morning’s weekly print needs to be respected as a concurrent indicator. Ask those who are still short the US Dollar about that (we covered our short position in the USD a few days ago).
Keith R. McCullough
Chief Executive Officer