NFP Friday is an institution for financial markets and especially the bond market.  No other piece of monthly economic consistently has as big of an impact.  Sure, there are occasions when we're not expecting jobs numbers to rock the boat, but in general, a 222k vs 187k beat (what we saw today)--especially following a downbeat 138 in the previous month--would be enough for some bond market weakness.  If this NFP was like the average NFP, the Fed would have seen enough labor market strength to justify its faster plans for removing monetary accommodation.

But the Fed isn't focused on labor markets at the moment.  The Fed has overtly communicated a renewed and redoubled focus on inflation metrics.  Inflation isn't much addressed in the NFP data, and where it is, today's report was somewhat equivocal (i.e. wages held steady and the workweek ticked up by a tenth of an hour).  Even then, we're talking EARNINGS--more of a precursor to inflation than an actual inflation metric.

Couple that with the fact that European considerations have dominated the past two weeks in the bond market and you can completely reconcile the complete lack of bond market volatility today.  10yr yields largely held a range between 2.375 and 2.395--pretty dang narrow for NFP Friday.  Fannie 3.5s were almost always between 102-11 and 102-13.  More telling still is the fact that bond markets hit the 3pm CME close at the exact same levels that preceded the NFP release.  In short, NFP was a non-issue.

European bond volatility was also a non-issue today.  German Bunds ended right in line with yesterday's levels.  THAT is the best argument for domestic bond markets ending unchanged.  Everyone's waiting to see how big a tantrum European markets can throw over their impending tapering announcement.