The “stronger” jobs report is complicated by mixed details. Half of the jobs gained were in local and state government, while goods-producing jobs declined. The unemployment rate fell to 4.1%, with over 140,000 nonfarm payroll jobs added. This mixture presents a challenge for rate cuts amid potential inflation risks from tariffs.

US Yields on the Rise

US yields increased, with the two-year yield rising 9.1 basis points to 3.8799%. It dropped to 3.697% earlier this week. The 10-year yield rose 4.1 basis points to 4.339%, previously hitting a low of 4.187%.

What we’ve just seen in the charts is a reactionary shift driven by a complex set of data. The euro-dollar pair, after initially sliding in response to fresh job numbers out of the US, fully reversed the dip, moved above where it started, and then dropped again. That kind of movement—not just back and forth but erratically popping over short-term resistance and then failing to hold—tells us more about mood and positioning than any clear economic conviction. People clearly don’t know what to make of it yet.

The price cut cleanly through the range between the 1.1753 and 1.17688 levels several times, which means that this small band has quickly become a pivot. We’re correct to track this area closely for short-term decision points. Each pass through the moving average—the 100 hour one, specifically—shows that there’s no lasting bias being built. The market’s not yet picking a side.

Over in dollar-yen, things are firmer. After reaching 145.22, it gave back some ground but not a lot. That the pair found support bang on the 200 hour moving average and held around the 50% retracement from the prior move indicates that buyers still have their hands in the game. It’s not without hesitation, but the fact that the pair traded back above and holds near this midline area’s top suggests demand isn’t done. Any fresh moves higher past this week’s high will likely catch attention.

Interpreting the Data Analysis

Now, to the data itself. The headline job figures initially looked positive, which is why we saw immediate knee-jerk moves. However, once we dug deeper, the gains looked oddly local—literally. Jobs added in government, especially at state and local levels, composed around half the total additions. That makes the report less about fundamental private sector momentum and more about temporary structuring or policy shifts. Meanwhile, the decline in goods-producing employment is less easily dismissed as noise; it offers a reason for caution.

This all comes at a time when policymakers are under pressure to consider loosening monetary settings, but the inflation backdrop—partly stoked by incoming tariffs—casts doubt on the timing. That’s why the jump in short-dated yields matters. The two-year yield, now sharply higher after dipping earlier, tells us that expectations for near-term interest rates just moved. When the market re-prices short-term debt this quickly, it isn’t just reacting to jobs numbers: it’s shifting confidence about how soon easing might really come.

Long-dated rates are also up, with the 10-year pushing higher again but remaining lower on the week. That’s a broader indication of how longer-term inflation expectations are adjusting slower than short-run rate predictions. We often look to the shape and relative pace of these moves to set expectations. When the two-year rises faster than the ten, it’s usually a sign of reduced likelihood of near-term cuts or belief in stickier inflation.

Traders don’t need to guess now—they need to observe consistency in where support and resistance hold. That swing zone in euro-dollar keeps blinking as a reaction level. Price wants to move but keeps stalling there. For yen pairs, the midpoint and that moving average are doing a lot of heavy lifting. If we see clean breaks that are respected, the next short-term trends will arrive.

In this current environment, where initial headlines might not tell the full story, positioning needs to allow for sharp adjustments. The key is to watch how yields behave now that the first wave of interpretation is over. Temporary overreactions in currency markets might reverse as yield and rate expectations settle on something firmer.

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