The Twitter Inc. account of U.S. President Donald Trump is seen on an Apple Inc. iPhone arranged for a photograph in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)

Trump Twitter Risk Adds a New Wild Card to Friday’s Jobs Report

(Bloomberg) -- Kenneth Broux, a currency and rates strategist at Societe Generale SA in London, typically arrives at work around 7 a.m., grabs a coffee and settles into his sunlit desk. And on Friday, fixating on Twitter will play an outsize role in his morning routine.

Broux will join traders, analysts and economists around the world in monitoring Donald Trump’s social-media accounts in the hours leading up to America’s monthly employment report -- suddenly an essential task. At least the five-hour time difference with Washington will leave him better-rested than his bleary-eyed counterparts across the Atlantic.

“We’re quite lucky because we’re in London,” says Broux, 45, who already watches his screens incessantly for macroeconomic and political news that could move markets.

Financial markets are preparing for another possible Twitter surprise after Trump posted on June 1 that he was “looking forward to seeing the employment numbers at 8:30 this morning.” Because the president’s economic team receives the numbers under embargo the afternoon before the report, his optimism was a market-moving tell. The tweet came at 7:21 a.m., and blowout figures followed: the economy had added 223,000 jobs in May, more than forecast, and unemployment slid to 3.8 percent, matching the lowest level since 1969.

Many, like Broux, will be eagerly watching the president’s feed for another tip-off, even though most see one as unlikely.

“Trump has introduced a market risk we have never had before, and that is Twitter risk,” says Ward McCarthy, chief financial economist at Jefferies LLC in New York.

What to Expect From the June Jobs Report 

  • Payrolls probably rose 195,000, according to median estimate of economists, after 223,000 in May
  • Unemployment rate unchanged at 3.8%
  • 2.8% y/y increase in average hourly earnings, up from 2.7% in May

Last month’s tweet had little precedent. Under government policy, the chairman of the White House Council of Economic Advisers is given the jobs numbers the afternoon before the official report, and he or she can brief the president. After that, everyone privy to the data is barred from publicly commenting on it until an hour after the figures are released. Keeping the information under embargo is meant to prevent advantaged trading on one of the most market-moving numbers in the world.

CEA Chairman Kevin Hassett shared the May numbers with Larry Kudlow, director of the National Economic Council, who confirmed in a CNBC interview that he gave the president the figures in advance. Normally, everyone keeps quiet until the release, but instead of staying mum, Trump took to the internet with his message.

“I think he was just excited last month,” said Todd Colvin, senior vice president at Ambrosino Brothers, a futures and options broker in Chicago. Colvin already gets in at 6:15 a.m., but he suspects other traders will come in early in case of a repeat. “Social-media communication has changed the political landscape. Now it’s starting to change the economics.”

The White House is again set to receive the employment numbers in advance. The Office of Management and Budget, which is responsible for the policy on the transmission of sensitive economic data, didn’t respond to a request for comment on Tuesday. Kudlow said June 1 Trump’s tweet wasn’t meant to signal a positive report and that “I don’t think he gave anything away.”

Jim Paulsen, chief investment strategist at Leuthold Group LLC in Minneapolis, said the tweet “was a great wink-and-a-nod that could’ve made you money last month, but I can’t imagine he’ll do anything like that again,” explaining that Congress might get upset if the president posts a similar tweet.

“It’s very difficult to predict if (a) there will be a tweet, and (b), what the tweet will be,” says Gennadiy Goldberg, a rates strategist at TD Securities in New York. He said traders and strategists at TD are normally in early, so they won’t have to change their schedules to accommodate an executive Twitter preview -- but that doesn’t mean they won’t be on alert. “It makes the markets a little more nervous.”

Even the absence of a tweet could prompt some trading, said Sean Simko of SEI Investments in Oaks, Pennsylvania.

Either way, the situation is spurring excitement.

“Everybody is going to be looking at that,” said Jason Barsema, co-founder of Halo Investing in Chicago. “I mean, my mother is talking about that tweet and she doesn’t follow the financial markets.”

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