Business optimism in the US is at a record level, last at the end of 2004. There is nothing worrying at first, but if we add the new jobs in the country that correlate very strongly with small business optimism, we see the huge spread between the two indicators. This is very worrying about the US economy, as small and medium-sized businesses in the country have a large exposure to the number of new jobs.
Once it became clear that business optimism for small businesses is at a record level, and NFP does not reflect this, we should also look at the plans for hiring small businesses. The index tracking the hiring of a new workforce records a strong rebound from All Time High values.
In view of this, we can assume that Trump's tax reform is not reflected as expected. Taking this into account, as well as the recent developments in the White House, we expect the USD volatility to pick up in the short term and the downward impulses to be stronger.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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