Well, my understanding is that he loved Jews, but hated Judaism.
Here's something I found:
In 1523, Luther accused Catholics of being unfair to Jews and treating them “as if they were dogs,” thus making it difficult for Jews to convert. “I would request and advise that one deal gently with them [the Jews],” he wrote. “ … If we really want to help them, we must be guided in our dealings with them not by papal law but by the law of Christian love. We must receive them cordially, and permit them to trade and work with us, hear our Christian teaching, ..."
As for "smearing ... anabaptists", YOU were the one who did the bait-and-switch chaining "peasants" to "anabaptists". So that's on you.