Signs point to a strong improvement in the US labour market

There's some very good signs from today's report

  • Wages are rising
  • More people are coming back into the market
  • Payrolls are picking up in the different sectors

The report today is very solid and if the underlying components continue to rise as they are then that's going to light up a September hike even more

If the unemployment rate rises as workers come back into the market the Fed will likely weather that move on the basis that jobs are still being created at a hefty pace. They may want to see unemployment around the 5.0% mark but they'll take a miss on that if wages and job gains keep trucking higher

While there's a lot of good in this report we still haven't seen a sustained trend in the subcomponents. We've got 3 and a bit months and 3 more reports for the Fed to chew over so there's plenty of time to see how things develop. I should imagine that the odds of a Sep hike just got trimmed

USDJPY is holding the highs as I type and the area between here at 125.75 & 125.94 will be a lot for the buck to chew through

As we've cleaned house on the way up I'm looking at the 125.15 level to act as support should we fall back

USDJPY 15m chart