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July NFP Report Instant Analysis: Is a Reversal in the Wings?

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The July NFP report hit this morning at 8:30 a.m. ET and it was pretty impressive.

The headline number was 255k, smashing the 180k consensus. We also saw an 18k upward revision to the past 2 months and better-than-expected hourly earnings.

This is the second big beat in a row, which has the big May miss looking like a one-time statistical aberration.

We're seeing a big rip in the dollar, a big dip in gold, and US and German government bonds are sliding.

The big question now is whether this will be a repeat of last month.

Last time around, we had a huge dip in bonds and gold that was bought very, very quickly.

Then, equities followed through after a bad start with SPX ripping 1.5%.

I would watch USD/JPY very closely.

If the dollar pulls back, that means the dovish status quo trade may keep on raging.

Also watch gold. If it bounces back, maybe the doves still wanna rock.

Keep in mind we're less than 30 minutes past the report and NFP is an anything goes day.

But as I write this, USDJPY is dipping back.

SPX futures are now up 8 handles I am not counting out a big run up in stocks today.

I would watch the following levels as possible signals for a reversal:

USD/JPY: 101.05

Gold: $1367/$1368

10YR US Treasury Yield: 1.500%

10YR German Bund Yield: -0.085%