First Call - Hedge Fund Telemetry

US equity futures are slightly positive ahead of the big payroll report at 8:30. European equity markets bouncing after yesterday's very weak performance. Asia mixed and I'll have some thoughts on China on today's Daily Note. Dollar firmer, with sterling underperforming. Oil lower. Gold down. Industrial metals lower. Bonds mixed, with core outperforming, but Italian debt underperforms on budget concerns. China's Yuan continues to weaken and closes in on the key milestone of 7 per dollar.
Upside leadership for technology stocks after sector gains in US after AAPL hitting $1T market cap. Trade tensions still a feature, but US market players remain skeptical of all-out trade war despite US tariff hike plans and Beijing vowing not to give into blackmail.
Macro updates in Europe include weaker services sector PMI readings from Eurozone and UK. Similar trend seen in China services PMI overnight. Carney Jumps Back Into Brexit Debate With No-Deal Risk Warning Elsewhere, Australian retail sales beat, but July services index sharply lower.

According to Bloomberg consensus, July non-farm payrolls forecast to have risen 193K following June’s 213K increase. Unemployment rate projected to have fallen to 3.9% from 4%. Greater focus will be on average hourly earnings, seen to have risen 2.7% y/y, unchanged from June (though on m/m basis up 0.3% compared to June’s 0.2% gain). With September rate hike all-but priced in, markets looking ahead to December where according to CME’s FedWatch, odds of a fourth 2018 rate increase at 70% from 64% previously.

Italian bond yields sharply higher, with the 10-year up more than 10 bps to move above 3% for the first time since early June and two-year paper is ~30 bps higher Focus on the Italian budget, with Finance Minister Tria beginning discussions on 2019 budget yesterday with PM Conte, deputy premiers and European affairs minister. Deputy PM and League leader said today that budget will be first steps towards flat tax and pension reform. Market sensitive to any increase fiscal spending following disappointing Italian GDP numbers ahead of rating agency reviews late August and early September.
A huge wrong-way bet on Bitcoin has left an unidentified futures trader unable to cover their losses, putting counterparties at risk and threatening to dent confidence in one of the world’s largest cryptocurrency venues. The more than $400 million long position in Bitcoin futures was amassed on OKEx, a Hong Kong-based exchange that’s ranked No. 4 on Coinmarketcap.com’s list of the biggest crypto platforms. If the shortfall still exists at the 4 p.m. settlement time in Hong Kong on Friday and exceeds the size of the exchange’s insurance fund, futures traders who have unrealized profits on OKEx may be forced to absorb the losses, in line with a "clawback" policy detailed on OKEx’s website. And I thought the Tesla squeeze hurt yesterday...

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