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Skeleton crew.

This week brings a relatively rare economic constellation: March’s US payrolls print lands on a public holiday, creating a small tear in the time-space continuum. Treasuries will trade just half a day, while the US equity market is shut.

The non-farm payrolls print completes a trifecta of labor market data this week, and the stakes are high. Job openings fell below 10 million for the first time since 2021, while just 145,000 private payrolls were added last month, according to the ADP Research Institute — below all estimates in a Bloomberg survey of economists.

The NFP figures take on an added importance given Friday’s print marks a full year of payrolls reports since the Federal Reserve’s liftoff hike last March. While signs of tightening have cropped up across the economy — for instance, in the banking system and the housing market — the American workforce has been remarkably resilient.

Friday’s numbers aren’t expected to show any signs of a slowdown. Consensus says that the US added 235,000 jobs in March, with the unemployment rate expected to stay put at a historically low 3.5%.

The fun part will be watching how incredibly thin markets digest the data. Liquidity is already an issue in the Treasury market — now add holiday trading conditions.

The Swap Connect scheme was first announced in July 2022 by the People’s Bank of China, Hong Kong’s Securities and Futures Commission, and the Hong Kong Monetary Authority. Illustration: FT montage/Bloomberg

China clears path for foreign investors to $5tn swaps market

China’s delayed Swap Connect scheme has won regulatory approval and is set to launch within months, opening up a $5tn swaps market to foreign investors needing to hedge their exposure to renminbi debt. The new program, giving easier access to tools for hedging interest rate risk, comes as a widening interest rate differential between Chinese and US government debt has driven outflows from the country’s renminbi bond market. (Financial Times | Apr 6)

Deposit outflows shine light on Fed program that pays money-market funds

Banks are under pressure from depositors’ embrace of money-market funds, pushing a popular Federal Reserve-sponsored financing program into the spotlight. Money-market fund assets are increasing at a record clip. Much of that cash is making its way to the Fed’s overnight reverse repurchase facility, which borrows from money funds and other firms in exchange for securities such as Treasurys and then returns the money the next day. The program, known on Wall Street as reverse repo, allows financial firms and others to earn interest on large cash balances. But some analysts contend it also is effectively draining funds from the banking system, where it otherwise could be invested or lent out. (The Wall Street Journal | Apr 5)

Treasury 10-year yield hits 2023 low as soft data accumulate

US Treasury yields declined further Wednesday — with the benchmark 10-year reaching its lowest level since mid-September — after a gauge of service-sector activity became the latest piece of data to suggest the US economy is headed for a downturn. US 10-year yield fell to 3.26%, the lowest since September. Market interest rates fell further below Fed’s policy rate. (Bloomberg Markets | Apr 5)

US regulator’s $91bn bond book casts shadow over mortgage market 

Investors are holding back from the $11tn US mortgage-backed securities market because of uncertainty over how regulators plan to dispose of the roughly $91bn portfolio they acquired from the collapses of Silicon Valley Bank and Signature Bank. Falls in the value of SVB’s vast MBS portfolio over the past year as interest rates rose were a significant factor in spurring the bank run last month that led to the second-largest bank failure in US history. (Financial Times | Apr 5)

IMF warns risks from nonbank finance institutions may intensify

The International Monetary Fund warned that financial risks could intensify in the coming months and urged policymakers to better manage the dangers from non-bank financial institutions that can spill into emerging markets. Years of low interest rates, low volatility and ample liquidity have created pockets of elevated financial vulnerability as trends reverse, the world’s financial firefighter said in a blog released on Tuesday to accompany an analytical chapter of its Global Financial Stability Report due next week. (Bloomberg Markets | Apr 4)

The Europol building is in The Hague, Netherlands. Photo: Eva Plevier | Reuters

US, European police shut down hacker marketplace, make 119 arrests

The US, Europol and police in 14 countries seized the infrastructure of a suspected Russian marketplace that claimed access to 80 million stolen banking, social media and email accounts for sale to hackers seeking to break into companies and government offices worldwide, senior Justice Department officials said Wednesday.

— The Wall Street Journal

IRS tax-filing service has malware

The efile.com service, which is provided by TaxWork LLC, a Venice, Fla.-based company that works with the U.S. Internal Revenue Service, attempts to launch malware from a cloud site, Bleeping Computer reported. Cybersecurity training organization SANS Institute has analyzed the problem, as have a handful of cyber companies. TaxWork hasn't responded to requests for comment.

— Bleeping Computer

Data grab

The European Commission is working on rules for who can access information emitted and generated by connected cars. There is no timeline for when rules will be issued, the commission said. Auto makers and companies that provide services to cars and for drivers, as well as consumer firms, are vying for access.

— Reuters

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Photo illustration: Rachel Mendelson | The Wall Street Journal, iStock

How to block out barking dogs, crying babies and other background noise during calls

Tech companies are rolling out new noise-reduction tools to filter out cacophony on your calls — but you need to know how to find them. As part of its iOS 16.4 update last week, Apple added its Voice Isolation feature to cellular phone calls, bringing the caller’s voice to the forefront and blocking out ambient noise. 

— The Wall Street Journal

An American diplomat's Web3 warning: The US is already losing smart technology allies it needs

Too many inside government are clinging to the past. Because of this, the US is at risk of blowing its approach to the next generation of the internet. When it comes to formulating digital asset policy, we need to embrace the internet’s inevitable evolution. We need more technologists, fewer lawyers, and less bias in favor of financial sector incumbents.

— Politico

AI desperately needs global oversight

Every time you post a photo, respond on social media, make a website, or possibly even send an email, your data is scraped, stored, and used to train generative AI technology that can create text, audio, video, and images with just a few words. This has real consequences: OpenAI researchers studying the labor market impact of their language models estimated that approximately 80 percent of the US workforce could have at least 10 percent of their work tasks affected by the introduction of large language models (LLMs) like ChatGPT, while around 19 percent of workers may see at least half of their tasks impacted. In other words, the data you created may be putting you out of a job.

— Wired