FXStreet (Delhi) - Sean Callow, Research Analyst at Westpac, notes that the FX and bond markets were very volatile on the stronger than expected US jobs data, with USD and US yields struggling to post net gains, despite the strong rise in equities. Key Quotes “There was plenty of fallout from the ECB meeting, with Draghi and Constancio on the defensive and newswires detailing the ECB's internal divisions. AUD/USD initially slipped from 0.7325 to 0.7280 on the strong US jobs data but soon squeezed up to 0.7385 amid violent price action in many markets. Spot iron ore made a fresh record low at $40.03/tonne, for a total fall worth 32% since September. The CFTC’s Commitment of Traders report showed leveraged funds reduced their AUD net short positions to -12.9k, the closest to square since 26 May. NZD/USD outperformed, rising from 0.6685 to 0.6740. This meant AUD/NZD fell from 1.0960 to 1.0885. Pricing for the RBNZ meeting on Thursday is 50/50, guaranteeing a lively day for the kiwi. Westpac continues to expect a 25bp cut to 2.5%. EUR/USD chopped around either side of 1.0900 then steadied around 1.0870. ECB President Draghi spoke in NY and said there was no limit to its stimulus tools, and Vice President Constancio said markets got it wrong and hoped markets will correct their reaction when the ECB's tools are fully appreciated. A Reuters source story argued that ECB president Draghi’s public dovishness caused a backlash from enough colleagues such that the ultimate easing measures were more cautious than otherwise. Reuters and also later MNI said that the ECB also didn’t want to be too aggressive on QE in case it caused some caution at this month’s FOMC meeting about USD strength. The US non-farm payrolls report for November was a decent result, defying the weaker trends in the ISM surveys. Payrolls rose 211k, along with very healthy upward revisions to the last two months of +35k. Household employment backed the establishment data showing a 244k gain. This kept the unemployment rate at 5.0%. USD/CNY quickly recovered from the surprisingly low post-ECB fixing Friday, closing CFETS at 6.4020. USD/majors traded mixed Friday but USD/CNH and USD/JPY were higher overall so a logical USD/CNY fixing would be say 6.4040-50. This would of course be a notable jump from the 6.3851 fixing Friday.” For more information, read our latest forex news.