NFP surprise on Thursday drove U.S. indices to record highs and boosted the dollar

As expected, Thursday stole the spotlight this week, delivering a crucial set of U.S. labor market numbers earlier than usual due to today’s Independence Day holiday in the U.S. With non-farm payrolls printing at 147,000 (above expectations) and the unemployment rate dipping to 4.1%, markets responded with renewed optimism about the U.S. economy. It was a clean, risk-on reaction: U.S. equities surged to fresh all-time highs, led by Nasdaq and S&P 500, and the U.S. dollar spiked sharply across the board.

At the same time, we had a strong surprise from Switzerland, where inflation (CPI) came in at 0.2%, double the expected 0.1%. That gave the Swiss franc a tailwind, helping it recover ground against several major currencies.

With U.S. markets closed today, liquidity will be lower, but that doesn’t mean things are standing still. Friday morning trading in Europe is underway, and we’re already seeing some profit-taking on the U.S. dollar, which is slightly giving back yesterday’s gains. It’s not a reversal yet — just a modest breather after a strong push.

On the currency front, the Japanese yen is firming slightly this morning, along with euro and Swiss franc. Meanwhile, commodity currencies like AUD and NZD remain under pressure, continuing their recent streak of underperformance.

Oil, which surged on Thursday, is cooling off slightly this morning — a modest pullback but still holding weekly gains. Meanwhile, metals are firm, with gold and silver continuing their slow grind higher after stabilizing midweek. The sentiment in metals remains constructive, especially given that yields are stable and the dollar isn’t accelerating further.

With no tier-one data due today and U.S. markets closed, volatility should taper off as the session progresses. However, traders will be watching ECB President Christine Lagarde’s scheduled speech, which is the only key event on the calendar today.