Yesterday's ISM data may have sparked some hope for a long-shot, come-from-behind, Cinderella story victory for a weak economy making an argument against a December rate hike.  In simpler terms, on the off chance that the rest of this week's data was as bad as yesterday's, maybe the Fed wouldn't hike rates after all. 

To be sure, that was a very long shot indeed.  It would have required a perfect storm of lucky breaks for bond markets, including the worst week of economic data imaginable and a surprising absence of action in tomorrow morning's ECB announcement.  Still, traders weren't overly eager to sell bonds until such a long shot could be ruled out. 

This morning's ADP data ruled it out.  Bonds have been in sell mode ever since.  The pace hasn't been extreme, but it's sapped about half of yesterday's gains so far. 

Yellen's speech hasn't done anything to alter the bigger picture.  The Fed chief said that although the natural interest rate is likely lower than it was in the past, that holding rates too low for too long risks overshooting targets and creating instability.  In other words, the hike is on (still).  After we see the ECB Announcement and NFP, there could be some course correction as far as trading levels are concerned, but it would take quite some doing for those events to damage the rate hike outlook.