[MARKET ANALYSIS] JPY rebounds to above pre-NFP, GBP benefits after REC jobs, USD indecisive into busy week's calendar

Mixed performance across G10s, JPY leading declines while the GBP is the gainer alongside the Antipodeans. USD overnight attempted to claw back NFP losses, peaking at 99.70, though the modest rally (as much as +0.2%) came under pressure since the EU open, with the DXY returning back to unch. around 99.60. Focus this week will overwhelmingly be on the CPI print, especially since FT sources last week suggested Warsh was focused on the inflation side of the mandate heading into the September meeting. On that note, market bets for tightening remain trimmed vs. Friday, with the OIS curve implying ~22% probability of a hike, around half of that seen pre-data. Today's calendar is light, though remarks are expected from hawk Hammack. A continued UK narrative of "no news is good news" with UK Parliament on recess and PM Burnham trickle-feeding incremental cost-of-living policies. GBP carry remains attractive, and, combined with technicals, a strong REC/KPMG jobs number is helping Cable today, which recently lifted above 1.35, with EUR/GBP supported just above 0.8560 - EZ drivers light with a strong Sentix survey not sparking a reaction. EUR incrementally firmer against most CEE, with the week's calendar highlighted by Polish/Turkish/Czech inflation. JPY is the clear underperformer, USD/JPY around 30 pips higher than the US payrolls release. Pressure which lacks a clear driver, with BoJ's summary of opinions hawkish leaning "could be considered that the pace of policy interest rate hikes will have to be faster than market expectations". However, MUFG writes retail short USD/JPY positions have "probably" been liquidated. Participants are now potentially turning to a carry strategy, which could be seen as more attractive than chasing the pair lower at these levels. USD/JPY looks towards 159.00, currently 20-30 pips off that mark.