Bond markets lost ground today, but less than you might expect given several of the typical inputs.  In terms of economic data, this morning's ADP Employment Report made a fairly strong case for weakness in bonds, coming in at 253k vs a median forecast of 185k.  While rates did indeed move higher following the data, half of the losses were already intact from the overnight session.  Moreover, bonds would go on to fully erase the post-ADP losses by the 3pm CME close.

Making all of the above slightly more impressive was the fact that stocks moved to new record highs.  There's no rule that says yields have to follow stocks, but over shorter time frames, it is the more common eventuality.  Bonds faced further pressure from the unwinding of yesterday's salubrious month-end tradeflows as well as a fairly big slate of corporate bond issuance.

To make it through all of the above with only modest weakness feels like a victory today, but not so much that it warrants complacency.  Bonds are definitely waiting for justification to break through to the best levels of the year and they definitely haven't seen it yet.  For that to change tomorrow, NFP would have to be exceptionally weak.