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Posted July 31, 2025 at 12:45 pm
Opinions: I’ve identified some undervalued forecast contracts below that expire tomorrow.
The ideas pertain to four distinct indicators released in three separate reports.
First, it’s highly unlikely that July job growth will exceed 260k and 310k because that would require a significant ramp in hiring that isn’t visible in my real-time data tools. This is a volatile indicator with an elevated deviation rate, but those levels are just far too high. We haven’t exceeded 160k all year as uncertainty and immigration restiveness has weighed on roster additions. The median estimate is at 110k.
Second, the US unemployment rate typically moves in 0.1% increments and has a subdued deviation rate. June’s rate of 4.1% is expected to tick up to 4.2% and I like the risk-reward profiles of the “Yes” at 3.9% and the “No” at 4.3% as a result because they would require large, low probability shifts of 0.2% and 0.3% to lose money.
Third, Euro inflation is expected to tick lower from 2% to 1.9% and similar to the unemployment rate in the US, it has a subdued deviation rate and generally arrives near projections. For this reason, I like the “Nos” at 2.2% and 2.4% which would require a significant beat of at least 0.4% to lose money.
Lastly, when you exclude the COVID month of March 2020, the greatest downward revision to consumer sentiment since October 2015 has been 3.1. Meanwhile, the average and median absolute revisions have been low at just 0.01 and 0.1 during that time period. In consideration of July’s flash result of 61.8, I believe there’s an incredibly low chance of an adjustment lower than 60, so I like the “Yes” there and at 58.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of July 31, 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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