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.
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