Markets are still digesting how the hot US jobs report last week will have an impact on the FOMC meeting next month. After running with the idea of a more hawkish Fed on Friday, we are seeing some of that luster fade. Fed funds futures are still siding with heightened odds of a 75 bps rate hike, still seen ~68%. That is up from around ~42% on Friday before the NFP.

But the dollar is seen giving back some of its gains today alongside Treasury yields. 10-year yields are down 4 bps on the day to 2.79%, once again keeping below its 100-day moving average at 2.86%. Meanwhile, the greenback is seen slightly lower against the euro, pound, franc, and loonie while the aussie and kiwi are holding modest gains against the dollar today.