Independent Strategy
Independent Strategy: Nick Kennedy

Nick Kennedy, Chief Economist

NICK KENNEDY, Chief Economist, joined Independent Strategy in December 2012. He bears primary responsibility for all aspects of Independent Strategy’s investment research process, with a focus on macroeconomics and financial market strategy. He holds an honours degree in Politics and Modern History from Manchester University and holds the MSTA designation from the Society of Technical Analysts.

Posts by Nick Kennedy

These indices measure the level of activity as measured against the pre-pandemic level using the Google Mobility Indexes as adjusted by Independent Strategy.  Activity is an average of the economic and mobility measures.  The data are weighted and averaged over seven days to define the trend.  The data runs through to 11 September.  The current deviation from where things stood pre-crisis is shown in Figure 1.

China

POST » 7th September, 2020 » China August FX Reserves

Slight increase in Chinese FX reserves in August, the $10.2bn m/m gain taking total holdings to $3.165trn.  But the build should have been far greater based on exchange rate changes and balance of payment flows.  Indeed, adjusting for FX valuation changes reserves actually fell again slightly (for the third consecutive month).

US

POST » 4th September, 2020 » US August Non-farm Payrolls

August’s non-farm payrolls report came out basically in line with expectations (+1.371mn vs +1.400mn consensus).  While we saw a modest downward revision to the July release, the report reinforces the overall “repairs underway” story for the labour market.  Part of this was due to further strong growth in government payrolls (+344k), private payrolls (1.027mn) were rather further from the markets more confident expectations.

We’ve been honing high-frequency indicators to follow the pace of recovery in major economies from the depths of the Covid pandemic lockdowns. Our indicators, entitled mobility and economic activity indexes, measure the level of activity against the pre-pandemic level using the Google Mobility Indices and the Dallas Fed’s Mobility Engagement measure. We adjust these to obtain a smoothed and comparable index of near-time activity.

US

POST » 7th August, 2020 » US July Non-Farm Payrolls

Another solid non-farm payrolls report, with 1.763mn jobs added in July, taking the 3-month gain to 9.27mn.  That means the US has now recovered roughly 40% of the jobs shed during the turmoil of March and April.  The report cements confidence that the labour market continues to repair, mirroring the conclusions of yesterday’s weekly jobless claims, if not the lower than expected ADP print we got on Wednesday.

The recovery of the US labour market continues.  ADP reported 2.369mn jobs were added in June.  This was accompanied by a sharp upward revision to May’s report (initially reported as a loss of -2.760mn job and now revised to a gain of +3.065mn.  That might bring it closer to the May non-farm payrolls report (+2.509mn) but is nonetheless a rather astounding revision, which perhaps encapsulates the problem of accurately measuring the Covid shock.

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