• U.S. May non-farm payrolls +431k, below median forecast of 513k. Private sector jobs paltry 41k. Unemployment rate down to 9.7% from April’s 9.9%
  • France’s Lagarde: Majority G20 favour budget consolidation as top priority. G20 sees risk of overheating in some Asian countries, Latin America
  • Obama: May jobs report is sign the U.S. economy is getting stronger. There will still be “ups and downs” as U.S. economy recovers
  • Fed’s Lockhart: U.S. jobs number points to weak labor market, but should not overreact to one month’s data. If current level of private job creation continues will not make substantial dent in jobless rate
  • Swiss Economics Minister: It’s too simple to say that pain threshold for CHF starts under 1.4000 vs EUR
  • Head of opposition Socialist party group: Hungary is not in a situation close to default
  • Hungary central bank: External/internal balances have improved significantly. Current account shows surplus, external financing capacity expected to remain positive in the coming 2 years
  • South Korean letter to U.N. security council requests action to deter “further provocation” by North Korea

Things were already pretty desperate as North American trade got underway. A disappointing U.S jobs report just exacerbated an already fragile situation. The market has a tendancy to steer clear of embracing risk ahead of the weekend and today proved no different. US stocks, oil down sharply, US treasuries bought as a safe haven. In the currency markets the yen benefitted from safe haven buying and diminishing US yields.

EUR/USD started around 1.2115 and was under pressure from the get go. Hedge funds and real money were notable sellers and the decline accelerated after the poor US jobs data release, albeit after some initial hesitation.

Talk had 1.2000 barrier options in place and defensive buying ahead of said interest lent some fleeting support. But as US stocks accelerated their losses so 1.2000 gave out. There wasn’t an immediate acceleration from there, indeed having posted a new session low 1.1994 the pairing bounced quickly back to 1.2015/25 area. That though was pretty much the extent of the pull back and we’ve subsequently been as low as 1.1956.

USD/JPY is down at 91.65 from early 92.50, the pairing getting hit hard right after the release of the disappointing jobs data. As US treasury yields and US stocks continued to fall, so USD/JPY continued it’s sojourn south. The EUR/JPY risk barometer saw almost one way traffic finishing down around 109.65 from early 112.00.

Cable gave up the best part of 1 1/2 cents, presently down at 1.4465.