A very strong set of non-farm payrolls numbers from the US overnight has reignited thoughts of a hike in rates from the Fed as early as Sept this year; and that has seen the US$ rally (the A$ lost almost a cent on the data release and now stands at just over US$0.76). May saw a total of 280,000 new jobs added against expectations that centred around 225,000. In addition the data for March and April were revised higher to add another 32,000 to the original estimates. Despite the strong jobs numbers a rise in the Participation Rate saw the headline unemployment rate actually tick slightly higher to 5.5%.
Concerns that the US economic recovery might have been stalling following the release of Q1 GDP data showed a slowdown have been allayed by these stronger jobs numbers. As a result the market is now reconsidering the previous assumption that the Fed might not move on rates until 2016. There is now talk of the first move up as soon as the September Fed meeting.