This goes to show just how shot the credibility of the Federal Reserve is now.
This is what happens when you bend you will need to Wall Street for 14 straight years. Now that we are in a situation where they may actually have to do their job, Wall Street doesn’t believe that they have the wherewithal to do so. Because of this, I think you have to look at it through the prism of perception over reality. Right now, traders perceive that the Federal Reserve is going to bail them out.
If you are an investment banker or a trading firm, you are hoping for poor employment numbers. This is because it means that themuch, and you may get your cheap/free money. This is how far from the financial markets have drifted from economic reality, because of the Federal Reserve itself. This is a mess that the Fed has created, and quite frankly in order to fight inflation, they are going to have to break something.
If we get a stronger than anticipated jobs number, the US dollar will probably spike against the Japanese yen because it will make the Bank of Japan step in and start buying more bonds. Part of the reason the Japanese yen has strengthened a bit over the last couple weeks has been that as rates drop around the world, the idea is that it takes less effort by the Japanese to keep the 10 year yield down to 0.25%.