Rates as of 0500 GMT

Market Recap

An unusual day in the FX market where USD is the 1 currency and EUR the 2, meanwhile JPY is the last on the list. Usually if USD is up then EUR isnt up so much. Also, usually if JPY is last it means a riskon environment but the SP 500 was down 1.6 on Friday and stocks in Asia are mixed this morning. The SP 500 futures are trading 0.5.

Fridays US nonfarm payrolls NFP data was good all around, a Goldilocks kind of report The headline jobs number beat estimates while average hourly earnings fell. The unemployment rate rose one tic but that went along with a higher participation rate as people got off their couches and returned to the labor force. Theres nothing in there to dissuade the Fed from continuing on its hiking path. In fact the employment situation is no longer a constraint on the Fed, they believe theyve achieved maximum employment and so are focused largely on inflation. In that respect it was the average earnings figure that was key, because a rise in earnings can feed through to inflation if companies pass the additional costs onto their customers. A fall in the rate of growth of earnings was therefore a Good Thing, but 5.2 yoy is still well above the Feds 2 inflation target and therefore a threat to price stability.

Furthermore several Fed officials got in their last comments before the purdah period begins ahead of the June 15th FOMC meeting. Various FOMC members have come out in favor of 50 bps hikes at the June and…