NFP Knee Jerk and Fade

It looks like the initial knee jerk reaction to the jobs report is fading quickly, I usually want to allow some time for the initial knee jerk to resolve and the dust to settle.

The NFP beat consensus, but the real news was the Unemployment rate ticking up from 6.6% to 6.7%, 6.5% has been the F_E_D's guidance for a rate hike, however Bloomberg reports the unemployment rate as being unchanged at 6.6%.

In any case, the safe haven flows overnight in to the Yen and Bunds was interrupted as the USD/JPY knee jerked higher on the NFP, but much like yesterday it seems Index futures are fading faster or not keeping pace with the USD/JPY.

ES is fading the initial knee jerk as is NQ which has taken back about half already and TF. USD/JPY has not faded as much.


I'll of course update the situation as we move toward today's op-ex open.

Perhaps more importantly, I'll cover the unprecedented first mainland Chinese default overnight as Credit markets in China are slammed before the first default occurred, investors are now repricing credit risk in what may be China's Bear Stearns moment as well as the harsh rebuttal from Russia over US/EU sanctions.