The US nonfarm payrolls report catalysed an extension of the bullish rates move (US 10y yields) that has been unfolding since mid-March. The more immediate repercussion was a liquidation of bearish EUR/USD positions building on CFTC statistics, in turn also propelling EUR/JPY higher (given the persistently bearish JPY backdrop). While the move in US 10y yields has taken the edge off the bullish USD trend in place since February, the market is far from turning a corner, and we view USD weakness as temporary. This is evident in the ongoing uptrend in USD/JPY despite the bounce seen in GBP/USD and EUR/USD, keeping the USD generally rangebound.
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Barclays