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Posted June 30, 2025 at 12:49 pm
Tomorrow’s trades of the day are Euro inflation and US job openings. The former indicator is much more predictable than the latter, and it doesn’t sport an elevated deviation rate. Against this backdrop, it’s rare to see EU annualized price pressures to arrive off of expectations in excess of 0.1%.
For EU inflation, forecasters expect a climb to 2% year over year in June from 1.9% in May. I’m a little lighter than the consensus and believe the figure will come in at 1.9% while maintaining a downward bias. In light of my prediction, I like the “No” answer at the 2.1% threshold which is priced at $0.75 and I call undervalued because the path to 2.2%, which is the result required for this contract to lose, is extremely narrow. Additionally, the risk-reward profiles of the “Nos” at 2.2%, 2.3%, 2.4% and 2.6% are attractive to me and those levels are being offered at $0.85, $0.94, $0.95 and $0.95. Finally, I also favor the “Yes” at 1.7% which is going for $0.96 and I don’t think a number south of 1.8% is in the cards for tomorrow’s print.
Tomorrow’s jobs openings data is more of a tossup but I don’t expect a surge in labor demand considering conditions have been decelerating lately. The median expectation is at 7.3 million while my estimate is modestly softer at 7.2 million, which compares to April’s 7.391 million. Moreover, out of the 26 forecasters surveyed by Reuters, the minimum prediction is 7.1 million while the maximum is 7.5 million. In light of my projection and the slower pace of employment momentum, I like the “No” answer at the 7.7 million threshold which is going for $0.91 and I also believe the “No” above, at the 7.9 million level, priced at $0.95, is additionally attractive. On the “Yes” side, I favor the 6.7 million and 6.9 million levels which are both costing $0.95. The headline result hasn’t arrived beneath 7.1 million since December 2020 and has failed to exceed 7.7 million for three consecutive months. Furthermore, a jump of over 300,000 is a rare occurrence for this indicator, and that’s what’s required for “Team No” to lose at 7.7 million. For “Team Yes” to face defeat at the 6.9 million total, a drop of roughly 500,000 is needed. The odds look good here.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of June 30, 2025. Red circles around the thresholds were inserted by J. Torres to highlight his preferred “Yes” and “No” answers throughout different levels.
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