As we noted last week, expectations had gotten so low that markets were ready to bounce on little justification. That’s what they did.

PRIOR WEEK: Reaction Rally On Dubious Justification

The shortfall in the loss of U.S. jobs created a risk-on environment spurring immediate gains for equity index futures, while sinking the dollar and bonds. Yields surged as the 10-year U.S. note sank by three-quarters of a point.

The euro is pushing its luck with the dollar even ahead of the critical employment report due out later this morning. Having touched $1.2854 already this morning, the euro is teetering on a surge to perhaps $1.2925 if today’s jobs report softens the perceived need to hold dollars on safety grounds. That aside, the euro seems to have several other tailwinds boosting its appeal at the moment.