Bond Bounce Because...

US UNEMPLOYMENT RATE ACTUAL 3.9% (FORECAST 3.8%, PREVIOUS 3.8%) 

Sahm Rule will trigger - pulling recession risk forward.As I suspected: Forget about a December rate hike! In fact, the SOFR market is pulling forward a cut to MAR from JUNE

SOFR3 June 50bps cut. 1st 25bps cut moves to March.

Recession Risk Pulled Forward

US economy adds 150,000 jobs in October, below expectations of 180,000.
This on the heels of continuing jobless claims that  rose for a 6th straight week, indicating those losing their jobs are starting to have more trouble finding new ones.

So claims rising and expected higher UE rate helped 10Y drop 10bp yday.
But the real push over the edge, I believe, was a report showing US labor productivity advanced the most in three years, while unit labor costs surprisingly dropped, helping alleviate the inflationary impact of wage growth.

Bonds love that!I wrote about this extensively back in Oct 2021 as the REASON bonds would continue to fall - and fall they did in 2022, historically, until coordinated central bank intervention stepped in October 2022 that helped bonds and equities from crashing.
Deflation of Wages Ended With Covid

Fast forward, and this past June I published an update:
Wage Inflation Delayed Recession.

And here we are:

Bonds AND Gold AND Yen are spiking - this is not bullish equities, but the market doesn't know it yet.

On Thursday, stocks surged, and bonds added to gains, because Fed hinted it may be done with interest-rate hikes. SPY added over 1.5% — its best session since May — while 10-year yields dropped and USD softened. Today, DXY is plunging.

So today, market is rallying further on reduced headwinds of rising dollar and rates... but it will not be a safe rally I'm afraid given the implications of pulling forward recession much faster now.