Tame Jobs Data Opens Door For Bonds to Stabilize

With rates pushing up to super long term highs by yesterday afternoon, it may not have taken too much of a miss in today's jobs data for bonds to rally.  That's essentially been the thesis so far this morning.  NFP was a bit lower than expected with a small downward revision to last month.  Wages increased, but some trade desks have pointed out that there is a calendar component that pulled some of August's wage gains forward to July. The only other offsetting component was the small downtick in the unemployment rate.  Bonds briefly sold of but have mostly been rallying so far this morning.

As far as the notion of recently higher rates providing fertile ground for a correction, the following chart helps put that idea in context:

In other words, the gains are nice, but also overdue and underwhelming in the bigger picture.