NFP provides Goldilocks foundation for........>

FOREX: NFP provides Goldilocks foundation for risk-on trade

-Friday's Nonfarm payrolls hit the highest level in 18 months, beating

expectations by 50%. As is often the case, markets didn't know which way to turn

upon release but the combination of a strong jobs gain headline and a better

participation rate with the lower-than-expected wage gains numbers suggested

this labor market may still be far from full employment. As a result, markets

bought up riskier currencies, emerging markets, commodities and equities, to the

detriment of haven currencies and treasury bonds.

-The better NFP number twinned with firmer oil prices lifted NOK to the top spot

in G10 FX, with AUD and CAD following close behind. CAD got a further

shot-in-the-arm from Canada's jobs report, which saw the unemployment rate

unexpectedly drop.

-JPY is the poorest performer, allowing USD/JPY to climb to Y107 just after NY

cut, at which over $4bln of options rolled off.

-Focus next week turns to US inflation numbers and retail sales, speeches from

ECB's Draghi and BoC's Poloz as well as an ECOFIN meeting in Brussels.