Higher Yields Today, But Next Week is More Important

Huge job numbers and a logical (but subdued) retention response

Earlier this week there were “whisper” numbers suggesting outside-farm payrolls could get closer to 1 million, as opposed to the median forecast of 647,000. And that’s not too far from reality (916k). Unemployment fell. Participation has increased. The hours were way too high. At other points in economic history, that big blow would have made yields scream higher, but to date they have risen only moderately. It is unlikely to break above recent highs before the early 12pm close. In any case, we are still waiting for next week to cast the official vote on defending the 1.75+ 10 year yield cap this week.