Bonds were very modestly stronger today, although the more important takeaway is that they effectively held in line with the highest yields of the past 2 weeks (not to mention the highest yields since before the March 20th Fed Announcement). In many ways, the Fed announcement was the event that kicked off a trial run down into the recent range. The policies behind the move were justified with concerns about global growth. 2 days later there were alarmingly weak economic reports at home and abroad. The Fed looked vindicated.
Since then, more than a few pieces of data have argued the other point. Most recently it was the Jobless Claims report this morning, showing the best levels since 1969, more than fully reversing the labor market missteps seen in the late 2018 data (yes, even before the government shutdown).
With the last NFP report being so weak (20k), we’re all but assured of a much bigger number this time around. The size of the necessary jump makes it much harder to know how to react as far as the bond market is concerned. That’s likely why bonds are staging in a more neutral zone ahead of the data. It’s their way of saying they’re ready to move back up into the previous range or double down on this one.