Non Farm Payroll Preview

This morning, we get the Employment Situation released at 8:30. Consensus estimates are for a loss of 175,000 jobs, and a range of 105,000 to 250,000.

I suspect those numbers might be too optimistic. As the Fed stated, we will have “Exceptionally low rates for extended periods of time.” That implies to me that whatever early look the FOMC had at prelim NFP data was not very encouraging.

Indeed, what set off yesterday’s 200 point rally was in large part expectations that the Fed will retain an accommodative stance. Indeed, even the Bank of England expanded their quantitative easing activities by £25bn.

We stand at one of those odd junctions, when bad news will be perversely good news. A weak NFP report will be more confirmationt hat QE will continue deep into 2010, and the Fed will keep the liquidity spigots wide open. Too strong an improvement — a less bad report — raises the spectre of the end of easy money. Mr. Market may not like that too much . . .

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