Bond markets may well have been able to imagine a situation where NFP came in weak enough for some traders to doubt the Fed's resolve in hiking rates at the December meeting.  I personally think that number would have to have been shockingly low for such a thing, but now that doesn't even matter.  The number we ended up with left nothing to the imagination.  Here's a run-down:

• NFP +271k vs 180k forecast
• Revisions added a negligible 12k jobs to the past 2 months
• Unemployment rate hit 5.0 vs 5.1 forecast/previous
• Participation rate was unchanged
• U-6 Unemployment dropped to 9.8% from 10.0% (first time under 10.0 since early 2008)
• private sector 268k vs 165k forecast, 149k previously (revised up from 118k)
• Hourly earnings +0.4 vs +0.2 forecast and 0.0 previously
• Average workweek unchanged

Bottom line, this was an unequivocally heroic report in the same way the last report was unequivocally awful.  This data series has a tendency to pull this sort of stunt, with plenty of examples of precipitous changes being followed shortly thereafter by an equal and opposite reaction.

The key benefit of a report that was so universally strong is that it truly flushes out any traders who were clinging to the notion that the Fed wouldn't hike in December.  As such, we get to see the market's true colors. 

Of course those colors are red, but they're not exceptionally more red than you might imagine.  10yr yields are 'only' up 9.8 bps at 2.334.  This easily could have been 2.40 if traders were on the fence to the degree suggested by some of yesterday's analysis.  Fannie 3.5s are down "only" half a point at 103-08.  In other words, bond markets have done a pretty good job of pricing in December's rate hike reality.