Markets:

• Gold flat at $1940
• US 10-year yields up 8.8 bps to 4.18%
• WTI crude oil up $2.25 to $85.88
• S&P 500 up 0.1%
• USD leads, CAD lags

The preliminary market response to the non-farm payrolls report was about what you’d anticipate — USD promoting, bonds bid — however then it bought sophisticated. The preliminary strikes reversed and bonds offered off, resulting in a robust bid within the US greenback. The strikes grew more and more aggressive with USD/JPY slumping to 144.45 then hovering to 146.16 — almost 180 pips.

The greenback roared elsewhere as properly with EUR/USD tumbling to ranges simply above the August lows. That worn out what had been a promising rally this week for the euro bulls.

Cable rose to 1.2713 on the US jobs report then dropped 1.2580 earlier than buying and selling sideways into the US lengthy weekend.

The one foreign money with a comparatively easy transfer was CAD as a poor GDP report sank the loonie initially after which USD energy did the remaining. The outcome was a 90-pip rise in USD/CAD to 1.3600, additionally wiping out some respectable progress that had been made earlier within the week.

The massive query left to reply is: Why the sudden leap in bond yields on what was a dovish jobs report? Some pointed to modest energy within the ISM survey together with the vitality worth rise however that is hardly compelling. Different speak facilities round charge lock promoting and I can not assist however surprise if Chinese language bond sellers had been in search of liquidity. There is not a simple reply and the lengthy weekend together with the flip of the calendar had been additionally cited.

The shortage of a transparent clarification places the US greenback rally on a shaky basis. We’ll must kind it out subsequent week — benefit from the weekend.