Not too hot, not too cold

Perfect! That was markets’ reaction after the release of the US job report showing higher-than-expected job creation, enough to be reassuring on growth, but not too strong to fuel inflation fears. Expectations that the Fed would be able to maintain a very accommodating policy even caused bond yields to fall to their lowest level in four months and pushed the USD lower. The EUR/USD exchange rate fell to 1.1808, before rebounding above 1.1850. And of course, US equities reached new highs. Asian markets did not follow overnight, after the Chinese Caixin PMI in services posted a strong decline to just above 50.