Tonight’s non-farm payroll data came out. The U.S. job market was stronger than expected, rate-cut expectations have been pushed back again, and short-term pressure is building — a pace many people didn’t see coming.
But what I’m really watching is not non-farm payrolls. On the same day, Russian drones directly struck the headquarters of Ukraine’s security service, while the U.S. simultaneously moved to block exports from Iran. U.S. diesel prices just hit a record high of $5.85 per gallon. With these three events colliding, the geopolitical risk premium has suddenly been fully priced in.
Whenever this happens, the debate over whether it’s a safe-haven asset or a risk asset starts all over again. The path it took the last time a similar situation occurred is still something many people don’t actually understand.
And whether to follow it this time or not depends on one key detail that many people overlook. I’ll leave that aside for now.
Do you think that with geopolitical chaos and stronger-than-expected non-farm payrolls, how will this one move this time?
But what I’m really watching is not non-farm payrolls. On the same day, Russian drones directly struck the headquarters of Ukraine’s security service, while the U.S. simultaneously moved to block exports from Iran. U.S. diesel prices just hit a record high of $5.85 per gallon. With these three events colliding, the geopolitical risk premium has suddenly been fully priced in.
Whenever this happens, the debate over whether it’s a safe-haven asset or a risk asset starts all over again. The path it took the last time a similar situation occurred is still something many people don’t actually understand.
And whether to follow it this time or not depends on one key detail that many people overlook. I’ll leave that aside for now.
Do you think that with geopolitical chaos and stronger-than-expected non-farm payrolls, how will this one move this time?