A focus in the week ahead will be 1%
It's all about the 1%: Not the high earners but the 10-year note yield. After an initial dip, yields are up 4 bps in the aftermath of the jobs report.
As we get closer to 1%, we're going to see more of that dollar reaction. But I don't see it changing the path of the broader dollar trade. Ultimately, it will be a dip to buy but it could be a big one because 1% is going to cause a real shudder in equities.
The thinking in the bond market might be that a softer jobs report raises the odds of stimulus. But also note the rise in wages in the report, which could be persistent. Average hourly earnings rose 0.3% compared to 0.1% expected and they're up 4.4%.
