Barclays_Global_Macro_Thoughts_What_s_not_to_like

Restricted - ExternalFOCUS7 October 2024Global Macro ThoughtsWhat's not to like?Ajay Rajadhyaksha+1 212 412 7669ajay.rajadhyaksha@barclays.comBCI, USMax Kitson +44 (0) 20 3555 2386 max.kitson@barclays.com Barclays, UK Where noted in the source notes, the views expressed within this report are taken from previously published research. For further detail, including important disclosures and analyst certifications, please follow the links on each page and on page 8.This document is intended for institutional investors and is not subject to all of the independence and disclosure standards applicable to debt research reports prepared for retail investors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for its own account and on a discretionary basis on behalf of certain clients. Such trading interests may be contrary to the recommendations offered in this report.Please see analyst certifications and important disclosures beginning on page 9.FICC ResearchGlobal MacroRestricted - ExternalCompleted: 07-Oct-24, 10:56 GMTReleased: 07-Oct-24, 11:00 GMTRestricted - ExternalThe world at a glance•The US jobs report was strong on virtually all counts •The Fed is unlikely to back off a 25bp cut in November •The Chinese equity rally continues, even with China out on holiday •Japan’s new PM has sounded unusually dovish, with elections looming •Making sense of it all7 October 20242Restricted - ExternalThe Fed will still ease in November despite strong payrolls•The payroll report was much stronger than expected, and a reversal from trend 1oThe jobless rate dropped, payrolls were stronger, and revisions were upwardsoAverage hourly earnings rose faster in September, as well as in AugustoThe payroll proxy rose only moderately, but overall, it was a very strong report•However, this report is unlikely to dissuade the Fed from easing 25bp in November 1oThe Fed likely still believes it is restrictive and wants to get to ‘short-run’ neutral quicklyoThe response rate for this report was low, and October should be weaker (hurricanes and strikes)•And then there’s the optics that will – inevitably – play into the Fed’s decision 1oThe Fed cut rates 50bp in September, even though CPI and retail sales were strongeroThey felt things were slowing enough that the first cut needed to be sharp, even in the last meeting before electionsoIt is difficult to now skip the next meeting, which would also be the first one after the election•For now, we don’t see a reason to change our 2024 rate calls, and especially the call for a 25bp Nov cut1 Global Economics Weekly: A critical quarter (4 October 2024)7 October 20243Restricted - ExternalA blockbuster US payrolls reportJob gains increased in both the establishment and household surveysSource: BLS, Haver Analytics, Barclays ResearchUS Economics Research: September jobs report weakens the case for aggressive Fed cuts(4 October 2024)7 October 20244Source: BLS, Haver Analytics, Barclays ResearchUS Economics Resea