Referring to the morning's weakness as exclusively "ADP-inspired" is a bit of an overstatement.  Bond markets have generally been trading in the direction of broad-scale "quarter-end" trading, and the subsequent correction of quarter-end trading yesterday and today. 

When market events don't line up with that broader momentum, we've seen bond markets opt to follow the trend rather than the data lately.  When the events ARE in line with the momentum, markets have moved more swiftly.

A good example of this was the most recent GDP print that coincided with the early phases of quarter-end bond market strength.  It's the same story with ADP this morning, but playing out in the opposite direction. 

With the arrival of the new month, the quarter-end positivity started to unwind (as can be noted in yesterday's weakness being completely undeterred by weaker ISM Manufacturing data).  This morning's ADP numbers (281k vs 200k forecast) have simply added fuel to that fire, taking bonds quickly to their weakest levels in nearly 2 weeks. 

If it's any consolation, MBS have stayed almost perfectly flat since then, holding just about a quarter point loss from yesterday's latest levels.Treasuries have been under comparatively more pressure with 10's leaking higher and higher after the morning's initial bout of selling.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
98-00 : -0-09
FNMA 3.5
102-08 : -0-07
FNMA 4.0
105-19 : -0-06
Treasuries
2 YR
0.4882 : +0.0232
10 YR
2.6155 : +0.0505
30 YR
3.4481 : +0.0521
Pricing as of 7/2/14 12:17PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:21AM  :  ALERT ISSUED: Bond Markets Quickly Weaker Following ADP
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jeff Anderson  :  "Gm, all. 281k? Where are they all? Anyone hearing if a lot of hiring? I'm hearing of hour reductions to reduce layoffs more than hiring lately. But curious what others hear on the street."
Hugh W. Page  :  "Let's hope we don't get a 300K Jobs print tomorrow. In any case, I locked em up yesterday to be safe."
Matt Hodges  :  "market isn't giving ADP as much credit as year's past"
Matthew Graham  :  "can't really consider it "confirmed" without hitting 3pm over 2.57 today and tomorrow (so 2pm tomorrow since it's an early close)."
Sung Kim  :  "busting through 2.57 isnt signifcant?"
Matthew Graham  :  "sign of the low-volatility times when a 3bp day-over-day change in 10's and a 6 tick drop in MBS = yikes."
Matthew Graham  :  "RTRS - REUTERS CONSENSUS FORECAST FOR ADP PAYROLL CHANGE FOR JUNE WAS FOR INCREASE OF 200,000 JOBS"
Matthew Graham  :  "RTRS- ADP NATIONAL EMPLOYMENT REPORT SHOWS U.S. EMPLOYMENT INCREASED BY 281,000 PRIVATE SECTOR JOBS IN JUNE"