US 10-year Treasury yields initially rose 3 bps after the ADP employment report but those gains have been washed away and are trading at 2.46%.
Since hitting 2.61% last Tuesday, yields have fallen in 5 of the past 6 sessions. Generally, yields and stocks move in the same direction but over that period it was the opposite as the S&P 500 rallied 2.6%. Part of the reason for the divergence is simply the belief that tapering is not coming in the next few months, job growth of 188K is nice but it’s not a blockbuster report and it will need to be confirmed by non-farm payrolls.
That said, stubbornness in the Treasury market is pointing to lower yields in the near term and that could sap US dollar strength, even if the correlations are minimal at the moment.