Rates as of 0500 GMT

Market Recap

Fridays US nonfarm payrolls showed a solid headline figure but some mixed details. On the one hand, the 428k increase in payrolls marks a full year with monthly gains over 400k, the longest stretch of such job gains going back to 1939.

In particular, employment as measured by the household survey fell by 353k, which was coupled with a 0.2 percentagepoint decline in the labor force participation rate, erasing the previous two months gains. Market participants focused on the lowerthanexpected average hourly earnings figure on a monthonmonth basis, which isnt in my table; I guess Ill have to revise it for next time. Earnings rose 0.3 mom vs 0.4 expected, 0.5 previous in a month where the seasonal pattern is for a large gain, meaning that the unadjusted wage gain was probably even less.

Nonetheless, US yields finished the day higher at both ends of the yield curve, which continued to support the dollar. On the other hand, falling stock markets depressed demand for the commodity currencies.

I note that Swiss yields rose the most at both the short and long end of the yield curve. Swiss bonds dont trade that actively so I wonder how realistic this price is. Nonetheless it seems significant that Swiss yields were the biggest mover while CHF declined. Normally, higher bond yields would tend to support a currency. This combination suggests that a risk premium may be creeping into CHF as the Swiss National Banks balance sheet gets hit by…