US nonfarm payrolls comes in high, traders worried about end of QE

Nonfarm payrolls (NFP) has come in, and it could be the most important macro release this year for markets. The number is high, a greater than expected jobs 175,000 were created this May. Economists had expected creation of around 160,000 to 170,000. But the reaction has been mixed.

Over at MarketWatch, 53.4 per cent of voters currently think stocks will react better with a number below NFP consensus (they're using a figure of 172,000) while only 31 per cent think that better than expected job creation is good for stocks.

This is because some traders are hoping that QE will continue if unemployment stays well above the Fed's unofficial target of 6.5 per cent (this release puts unemployment at 7.5 per cent). If things improve too much, QE might start disappearing, which could be negative for stocks.