PickAlpha Evening Insights | 2026-01-09 - Three Trades For The Next Trading Day
• Stocks mixed as front-end yields repriced after soft US payrolls and firmer consumer sentiment. • Fed H.8 weekly bank balance-sheet release flagged deposits and credit trends. • Three Trade Ideas.
Market Wrap
Market Recap — The session digested a light-but-significant macro slate that nudged yields and equity leadership. US nonfarm payrolls rose 50k with unemployment at 4.4%, while preliminary U. Michigan sentiment improved to 55.0. The Fed’s Z.1 showed large household net worth and debt levels, Baker Hughes’ rig count ticked down slightly, and Canada reported modest job gains and 6.8% unemployment. Late-session H.8 bank balance-sheet data rounded out the tape.
Intraday — From the open through the afternoon, markets parsed the 8:30 labor prints: US payrolls up 50k and 4.4% unemployment alongside Canada’s +8.2k jobs and 6.8% jobless rate, which together recalibrated rate expectations and FX flows; consumer mood at 10:00 was firmer with UMich prelim at 55.0; midday Fed Z.1 highlighted household net worth of $175.5tn and household debt of $20.8tn; Baker Hughes reported a US rig count of 542 versus 546 prior, subtly weighing on energy supply expectations.
After Hours — Post-close activity centered on the Fed H.8 release, which put bank deposits, credit and liquidity dynamics back in focus for funding and regional-bank narratives. No company earnings or court/policy shocks were reported in the after-hours window.
Three Trades For The Next Trading Day
1/3 Long USD/JPY ($JPY=X) — If at the Sunday 2026-01-11 FX reopen (17:00–18:00 ET) JPY=X trades ≥0.5% above its Friday New York close after Japan’s M2+CD data release, go long JPY=X and target an additional 0.5% move by Monday 08:00 ET, with a stop 0.3% below entry.
Japan’s M2+CD money supply growth informs views on domestic liquidity and Bank of Japan expectations, which directly affect JPY FX pricing. A significant upward gap in JPY=X at the Sunday reopen would signal a strong market reaction to the data. The trade aims to capture continuation of the initial, data-driven move into early Monday trading hours.
Trade credibility: actionability 6.0 | timeliness 8.0 | clarity 5.0
2/3 Long $EEM — On Monday 2026-01-12 US cash open, if EEM opens down ≥1% versus its 2026-01-09 close following Egypt’s CPI release on Saturday, go long at market, target a 1.5% gain by Tuesday’s close, with a stop 1% below entry.
Egypt’s December CPI print can alter Egypt’s policy and real-rate outlook, affecting EGP risk premia and EM sovereign pricing, with spillovers into broader EM FX and credit. A sizeable Monday gap-down in EEM after the data would likely reflect a risk-off reaction. Using a broad EM equity ETF allows a tactical, liquid rebound trade on any overshoot.
Trade credibility: actionability 7.0 | timeliness 4.0 | clarity 7.0
3/3 Long $EWJ — On Monday 2026-01-12 US cash open, if EWJ opens up ≥1% versus its 2026-01-09 close after the weekend release of Japan’s M3 money supply data, go long at market, target a 2% gain by Tuesday’s close, with a stop 1% below entry.
Japan’s M3 is a broad liquidity gauge, watched alongside rates and FX to infer shifts in monetary and credit conditions. A notable positive gap in EWJ at the first US session after the M3 release would indicate that investors interpret the data as supportive for Japan’s liquidity backdrop. The trade seeks to ride that pro-liquidity equity momentum tactically.
Trade credibility: actionability 7.0 | timeliness 4.0 | clarity 7.0