Those releases have mostly been smooth since then, but there was a snafu in November that messed with traders. USDA.gov was down for roughly six minutes, and corn prices jumped during the delay. Prices came back down once the data came out. There was another technical problem in December.
The government has tightened its lockup procedures over the years. In 2012, the Labor Department wrapped an investigation, that resulted in officials rescinding the credentials of several agencies in the lockup, including one firm -- Need To Know News -- which was in fact owned by a German exchange and feeding data to traders. They were removed from accessing the room and the agency updated its technology.
Here are more reactions from finance pros:
Marshall Front, chief investment officer of Front Barnett
“Major players betting on economic data are algo traders. They don’t wait for interpretation anyway, they have key words that they look for in a release, and if those words are mentioned, they’ll act, they don’t wait. How algos will react to that is yet to be seen. But I don’t think this is a development that enhances the public’s knowledge. For media workers, it forces people to make statements that may not be as carefully drawn on because they didn’t have the time to study them. It’s not a good development.”
Dave Lutz, managing director of JonesTrading
It’s “sure going to mess with the headline-reading algos.”
“It’s just going to make things a bit more volatile around releases for longer.”
Stephen Stanley, chief economist at Amherst Pierpont Securities
“Obviously some firms are bigger than others, some have more resources than others, and some will make a choice in the environment that might ensue to dedicate more resources to this, so I do think the playing field at the margin would be less level.”
Delores Rubin, senior equity trader at Deutsche Bank Wealth Management
“As a trader, you look for the headlines with an idea going in what you expect, what is consensus and how you think to position on the outcome. That is the normal immediate action, but the in-depth media analysis is sought to further understand the details, get a ‘trusted’ interpretation and also make sense of a market move that does not match your own expectation. It is hard to say if the impact will create more volatility on economic data releases or a pause as traders wade through the details of the data or await the media analysis.”
This article was provided by Bloomberg News.