ING Bank - "February has presented an unambiguously good US nonfarm payrolls report, with both the non-farm payrolls and unemployment rate pushing in very encouraging directions. Non-farm payrolls rose 236K, up from 119K, which was part of a 15K net downward revision to the previous month’s data.
(...) The near term market reaction will be to sell the back end of the yield curve, and for equities and the dollar to rally (especially against the JPY and GBP). With the Fed committed to keeping rates on hold for the foreseeable future, the front end of the yield curve is locked down, leaving all pressure on Treasuries to come in the back end of the curve. Steepening for now seems probable. However, with sequestration upon us, and the labour market far from immune, combined with the depressive effect of the payrolls tax cut expiry, we envisage a period of much softer data and rising anxiety as we head towards the May 19 debt ceiling stand-off."