One of our most frequently discussed themes of late has been the relative disregard for economic data on the part of bond markets.  This was to be put to the test on Friday with the jobs report.  After all, if any piece of economic data could buck the trend, that's it.

While bond markets did react initially, that much was to be expected.  As the day progressed, MBS and Treasuries returned near unchanged levels despite the much stronger data.  That was already impressive enough, but there was still the question of whether or not the jobs data would kick off more negative momentum for bonds in the coming week.

With today being the first day of what was then "the coming week," we now see that the trend of data disregard remains firmly intact.  Trading levels are back to Thursday afternoon's (from before NFP).  Where are cues coming from then?  There's no question that stock markets are playing a role. 

Beyond that, technical levels are providing a framework once the direction of the movement is determined.  For instance, 10yr yields fell today, but were careful to fall no more than the trend boundaries allowed.  That means 10's still run the risk of confirming an uptrend unless they manage to break below 2.40 tomorrow.