Post NFP Comments: USD Falls As Bears Take Control

Published date: 02/06/2018

All metrics in the US data report are strong, and fears that nearing full employment could hurt the headline number have been allayed by the 200k+ print - coming in at a very healthy 223k for May.  This pushes the unemployment rate down another tenth to 3.8% while wage growth has returned to 2.7% after the 0.3% rise in earnings in May.

It is not the largest USD response we have seen, and it is fair to say that the US tariffs reinstated this week have taken the shine off the USD.  EUR/USD especially is sticking to the mid 1.1600's for now, and this after a number of failed at a stronger correction through 1.1730-50. As such, we find the pair in a familiar over-exhausted state, so we may get a little more freedom on the upside in USD/JPY, which could test 110.00 later today if stock markets take kindly to the numbers.

The US 10yr Note has risen back above 2.90%, but much of this was ahead of the number we are still well off the recent highs which tipped 3.10% to send USD/JPY into the mid 111.00's.


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