Today's weak Non Farm Payrolls data on the creation of new jobs in the United States (142 against the 201 expected) again pushes back the Fed's rate hike: at this point, October is probably and definitively excluded from the list of possibilities while December drops below 50% probability.
The communication work of the FED is further complicated as it finds itself in the strange situation of having to normalize its monetary policy after many years precisely in one of the moments of greatest weakness and fragility of the markets and of the global economic cycle.
Obviously it is precisely the theme of the global slowdown, emerging economies and China in the lead that worries the markets with the surreal consequence that after years of waiting and fears, the markets now see the Fed's hike both as a liberating act and a sign of confidence in the stability of at least the American economy.
After all, on the other side of the Atlantic we are now very close to full employment, but, with a world still characterized by violent deflationary pressures, the choice of the Fed becomes really complicated.
Among other things, the world is obviously benefiting from this situation of uncertainty in the core rate with the 2-year Treasury back below 0,5% and the Bund close to XNUMX%, but on the other front, corporate and emerging markets continue to suffer, heavily squeezed in the twin grips of rising risk premiums and increasingly tight liquidity.
Precisely the issue of liquidity, closely linked to the regulatory revolution that is affecting the banking world, risks becoming one of the main risk factors in the near future. The volumes of the corporate segment have exploded in the last five years while the absorption capacity in the "warehouse" of the big banks has collapsed, not due to a directional view of the market, but due to the forced slimming treatment to which the regulator has subjected bank assets.
If the goal is clearly worthy (strengthening the banking system), the side effects could be very delicate also considering the simultaneous downsizing of other classically anti-cyclical players such as hedge funds.
