Here's a look at the change in the Fed funds futures curve after the Fed policy decision in July and after the US non-farm payrolls last Friday:
The change is rather minimal but that's essentially it, isn't it?
As things stand, traders are not pricing in any more rate hikes by the Fed this year and the jobs report on Friday validates that sentiment. That comes despite the wages numbers feeling rather hot again. But it is clear that while the labour market continues to be rather tight, we are seeing some signs of cooling perhaps.
Going back to the Fed pricing, it just means that we now have to move on to the next big data. We've passed the first key hurdle and now the next one will be the US CPI report coming up later this week. This one should have a bigger influence on the dollar and rates pricing, so it might be a case that markets will remain more apprehensive until then.