In looking at yesterday's activity in bond markets, we could see some level of determination to rally regardless of the incoming economic data.  The conclusion was that this was the easiest "lead-off" stance in which to digest today's Nonfarm Payrolls data.  These lead-offs aren't the sort of occurrences that make anyone think bonds could keep rallying despite a 78k 'beat' in NFP though (288k vs 210k forecast), yet that's exactly what happened.

Granted, bond markets paid immediate respect to the colossal beat, losing quite a bit of ground very quickly, before stemming losses.  But shortly thereafter, clues began emerging as to the determination in the underlying stance.  In other words, yesterday's "lead-off" was the real deal as traders clearly weren't done buying bonds yet today, but also couldn't simply keep buying in the immediate wake of such a big jobs report.

Of course there are serious considerations surrounding the effect of geopolitical risk on today's gains.  In fact, it's entirely possible, if not likely that bond markets couldn't have made gains without Ukraine-related headlines.  BUT!  It's even more likely that bond markets would NOT have made gains if the Ukraine headlines were the only consideration. 

The conclusion is that we were able to move to 6-month rate lows today due to a very lucky combination of of the two events (positive tradeflow environment and Ukraine headlines).  It's excessively important to keep in mind at this point that both of these factors are ephemeral by their very nature.  Combine that with the fact that 10yr yields stopped short of breaking the very lowest lows from the Feb-present range, and it's a good enough argument for staying cautious until we see additional evidence that the range may soon be definitively broken.