Market wrap: nothing could help the dollar, not even nonfarm payrolls - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: US payrolls data was stronger than expected but failed to give US interest rates or the US dollar much of a boost. In France, centrist Macron easily beat populist Le Pen (around 65% to 35%).

Interest rates: Neither the payrolls report nor the Fedspeak managed to excite bond markets for more than a few hours on Friday, US 10yr treasury yields trading around 2.35% during the latter part of the NY session, compared to 2.36% during the London morning. 2yr yields closed unchanged at 1.31%, although Fed fund futures yields did firm, now pricing a June rate hike as a 90% chance. CFTC speculative long positioning in 10yr note futures was reduced slightly but remains long, while 3mth Eurodollar shorts remain near a record level.

Currencies: The US dollar index closed 0.2% lower, at a level last seen in November. EUR rose from 1.0980 to 1.1000 – a six-month high – on Friday, and has traded only slightly higher to 1.1021 this morning following the French news (suggesting the victory was largely priced in). USD/JPY rose from 112.20 to 112.80, and this morning briefly gapped up to 113.09 before retracing. AUD bounced off a four-month low of 0.7368 to 0.7427, but hasn’t run with the EUR this morning, instead slipping to 0.7412. NZD similarly rose from 0.6860 to 0.6929 on Friday, but slipped to 0.6899 after the open this morning. AUD/NZD fell from 1.0750 to 1.0703, slightly higher this morning at 1.0735.

The CFTC report showed US dollar index longs were reduced further, EUR longs were increased to a three-year high, AUD longs were reduced slightly, and NZD shorts were reduced."