Bonds Positioning For Weaker NFP?

One of the best things to understand about the jobs report is that the payroll count can go BIG in either direction, regardless of what the other data or labor market trends have been suggesting. Today's data suggested a predictable level of labor market weakness. This isn't something that would guarantee a bond rally, but that's nonetheless what happened.  Rather than think of this as a "lead-off" or bonds getting in position for a weaker NFP, it's more accurate to treat such moves as a simple circling of the wagons as traders exit previously held positions to get neutral ahead of a high risk event.  The movement in the yield curve is a solid clue here as it had steepened to what are essentially the highest levels since early 2022 by Wednesday morning and has been correcting ever since (correcting = 10s and 30s doing better than 2s and 3s). All of this is much ado about nothing.  The point is as boring as it is true: bonds can rally or sell on Friday at a pace that's only really limited by the size of the beat/miss in the data.