Early Weakness Erased After Labor Market Warning Signs

The first few hours of domestic trading caused some concern that the post-Fed rate correction was far from over.  At the time, yields were up several bps from closing levels and had just broken above yesterday's highs.  That's not the sort of thing you want to see if you're hoping for bonds to level off.  Everything changed after the Consumer Confidence data.  While this isn't a report that reliably causes a reaction in the bond market, it's "labor differential" component is more closely watched recently.  Derived by subtracting the "jobs hard to get" line item from "jobs plentiful," the differential is increasingly pointing toward a softer job market--something that is well understood to align with more aggressive rate cuts from the Fed.