Weaker Econ Data. Lower Yields

It’s been a fairly simple morning so far for the bond market. Both of the morning’s key economic reports came in weaker than expected. In the case of ADP employment, that’s fairly straightforward and fairly substantial (37k vs 115k f’cast), even though it’s always worth remembering how inconsistent the correlation with NFP (Friday’s big jobs report) can be. The ISM Services (or “non manufacturing”) data was more nuanced.  The growth metrics were mostly weaker, and decidedly so.  But the employment index moved up–always important on jobs week.  In addition, the ISM price index continues to surge–something that bonds can’t help but notice.