This morning's centerpiece was the nonfarm payrolls number coming in at 260 versus a median forecast of 200k.  Additionally, the previous month was revised up to 315k from 263k.  Internal components were mixed with some bond-friendly argument to be made from 3.7% unemployment and a 0.1% drop in the participation rate (effectively a 0.2% increase in unemployment over last month's 3.5%).  Despite the counterpoint, the NFP headline clearly argues against a change in the Fed's rate hike outlook.  Nonetheless, bonds are holding in slightly positive territory after an initial sell-off. 

In fact, Fed Funds Futures suggest that traders breathed a sigh of relief despite a few moments spent trading the hotter NFP headline.

If forced to assign meaning to this development, we'd think of it like this: NFP's importance today pales in comparison to next week's CPI data.  The only meaningful result would have been a substantial undershoot of expectations.  Anything else is a status quo.  The modest recovery could be as simple as the implied 0.2% uptick in the unemployment rate (0.1% actual + 0.1% via labor force participation rate) providing an outside chance at an early hint of labor market softening.  Other 3-month annualized measures also suggest softening, but it would be a surprise if they didn't considering this data is still normalizing after being much stronger than historically normal.