Europe While yesterday was a forward guidance story, today was a US jobs report story that saw the June payrolls report come in above expectations at 195k, while the May report was also revised higher to 195k, sending the US dollar soaring and US treasury yields to their highest levels since mid-2011. With stock markets already absorbing the surprise from yesterday's forward guidance bombshells from Draghi and Carney, the better than expected payroll numbers has seen equity markets caught in two minds between the prospect of the imminent prospect of tapering, and the benefits of an economic recovery. After initially popping higher, equity markets struggled to sustain their gains with the FTSE100 surging to 6,500 before slipping back sharply and turning sharply negative in the afternoon session. The German DAX should have offered some clues given its failure to rally at all on the initial payroll number, and then quickly rolling over to drag the rest of Europe's markets lower as investors took one look at the sharp rise in bond yields and decided to take some profits on their weekly gains. It would appear that rising interest rates and higher equities don't make comfortable bedfellows and markets will be hoping for further clarification on tapering next week from Fed Chairman Bernanke when he is due to speak in the wake of the release of the latest FOMC minutes. The rising US dollar has also clobbered metals prices with copper and gold getting crushed dragging the mining sector down with it led by Fresnillo, Antofagasta, Randgold Resources and Rio Tinto. Amongst the better performers builders merchant Travis Perkins has continued to do well on the back of continued improvements in the housing market, while British Land is also higher on news that it has bought an 11 acre estate in the West End of London. US US markets opened around 60 points higher this morning having missed yesterday's move higher in Europe after the latest US employment report posted a rise of 195k new jobs, better than the expected 165k, while an upward revision to the May number also to 195k, helped the positive mood. Despite the better number a surge in bond yields in the wake of the payrolls numbers had the effect of shaving about 60 points off the opening print, as investors started to fret about the sharp rise in bond yields. With Samsung disappointing on their profits numbers today Apple shares have come under pressure on the basis that they will suffer similar problems. FX The US dollar has crushed all comers to day in the wake of today's payrolls report with the higher yielders absorbing the most of the losses, with the Swedish and Norwegian currencies being the biggest losers. The pound also slipped sharply to three month lows, as UK gilt yields rose sharply to 2.5%, despite the Bank of England's attempts to talk them down yesterday. In being so dovish the Bank has created a problem of a weaker pound, without the benefit of lower borrowing costs, given the inability of German and UK yields to decouple from the rise in US bond yields, as investors speculate that a Fed tapering will come sooner rather than later. Commodities Copper prices and gold prices have been absolutely crushed today in the wake of the resurgent US dollar with gold prices being hurt by the speculation about imminent tapering. Oil prices have continued to remain underpinned, firstly on reports that the Egyptian military had implemented a state of emergency in the Suez region of Egypt. The better than expected jobs numbers out of the US have also helped on the margins, however given that prices are near multi week highs, there is a concern at some point they could act as a drag on growth. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.