NFP is the biggest piece of economic data on any given month--so big, in fact, that financial markets treat it as a focal point for trading activity regardless of the outcome.  As we know, stronger job creation is generally bad for rates and weaker job creation helps rates move lower.  But sometimes, traders simply have trades they're waiting to make until they see how NFP comes in and how markets are reacting. Today was such a day.

The weakness in bonds was too sharp to be justified by a jobs report that came in with weaker than-than-expected payrolls, even if wage growth was +0.4 vs +0.3.  I'm not saying the wage component wouldn't have hurt at all--just that a 7bp sell-off in 10yr yields doesn't quite fit with this morning's data.

Such a sell-off DOES fit with the recent technical landscape.  Keep in mind, the last 6 days have been, by far and away, the best winning streak for bonds since the election.  We knew that one of the nearby technical levels (2.34, 2.29, and 2.18) would be the most likely spot for a bounce.  The fact that yields moved quickly back up to 2.42% (the most recently crossed technical level) all but confirms that today was about traders cashing in on the recent rally.