Market players were in for a touch of excitement following the April 2 release of the Labor Department’s March employment report. Not only did the figure indicate that 308,000 jobs were added in March—a far cry from economists’ more reserved expectations—but it appears that the huge gain was leaked at least two minutes early, proving to be potentially lucrative to those in the know.
The Wall Street Journal pointed to a report containing the employment figures written by Reuters newswires, which ran on Yahoo’s finance page with an 8:28am time stamp, the exact minute that bond futures contracts started to plummet. (Prior to becoming the editor of US Credit, I worked at both Reuters and Dow Jones.)
The Journal reported that between 8:28am and 8:30am, the June bond futures contract fell to 112.07 from 113.12, and shortly thereafter fell to nearly 108. Reuters, however, insists that the problem lay with an incorrectly set clock, which sent the feed to Yahoo with the incorrect time, but that the report did not go out until 8:30.
Figures don’t lie, and most of the traders I correspond with are of a like mind: namely, that the report was leaked early. But in all honesty, how many securities traders, who have some of the most technologically advanced information terminals at their fingertips, rely on generic financial websites like Yahoo for their trading information? And why would traders be perusing Yahoo two minutes before the release of such an important economic indicator rather than watching their respective news terminals that their companies spend huge sums of money to gain access to?
As this mystery unfolds, it’s bound to be a lot more complicated than would seem on the surface.