Nothing Goes Up in a Straight Line

Regardless of how the monthly US labor report came out, people were primed to sell Treasuries but finally this afternoon we stabilized now that rates are back to levels not seen since early last year. 3, 10 and 30 year bond auctions are looming later this week but hopefully we have priced in a sufficient concession to bring in buyers.. While the US economy appears to be growing at healthier pace, housing is not likely to benefit from higher interest rates and structural unemployment continues to be a challenge so there seem to be some built in restraints to excessive growth.  It is a somewhat goldilocks environment in which corporate bonds can thrive as the economy is strong enough to support improving fundamentals while not too strong as to provoke a more painful spike in interest rates. Credit spreads are in fact tightening for that very reason.