A monthly unemployment rate increase of over 0.3% is historically rare, occurring in just 40 of the last 925 job reports going back to 1948, or 4.3% of the occurrences. Meanwhile, tomorrow’s print is expected to serve an unchanged 4.1% rate from February, according to the consensus estimate. But the IBKR ForecastTrader Contract asking, “Will the US Unemployment Rate exceed 4.4% in March 2025,” offers the “No” answer at what I believe is an undervalued $0.81, corresponding to an 81% probability that the unemployment rate will not come in above 4.4%. I also took into account the lower threshold at 4.3% but given that it’s only 3 cents cheaper at $0.78, I though the risk-reward dynamic was more favorable at 4.4%.
Source: ForecastEx
Note: Prices are highest bids as of the morning of April 3, 2025.
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This material is from IBKR Macroeconomics, an affiliate of Interactive Brokers LLC, and is being posted with its permission. The views expressed in this material are solely those of the author and/or IBKR Macroeconomics and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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Divulgación: ForecastTrader
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