Market comments

Friday capped a very wild week in markets with a 'blockbuster' payrolls report of 280K that saw an upside surprise in average hourly earnings. The immediate take-away is that the Fed is therefore more minded towards an earlier than a later rate hike: that added to the sell-off in bonds, where 10-year Treasuries are now at 2.41%, and to the recovery in USD, with EUR at 1.1104 this morning, notes Rabobank.

However, dig a little deeper and one could argue that if the Fed are going to tighten policy into that kind of jobs number then both the markets and the US economy are going to be rocked and rolled much further.

It really doesn't take too much data mining to see that the jobs gains were once again mainly at the 'less glamorous' end of the labour market; that apparent wage pressures are hardly widespread; and that 27% of the new jobs were due to the statistical 'birth/death' model that makes assumptions about where we are in the economic cycle rather than measuring real jobs (and its assumptions are actually more bullish now than this time last year despite the fact that US GDP was growing four times faster back then), added Rabobank.