Here is a solid summary of November's unemployment report and this article summarizes the implications for the bond market.
I am still pretty sure the bond market has been getting hurt because investors are beginning to look at real returns rather than nominal returns. With the dollar making new lows on the jobs report I think that the trend towards higher yields will reassert itself shortly. The Fed may begin facing political pressures to stop hiking but they need to keep ahead of the currency market which means hiking until positive U.S. economic data gets reflected by dollar strength.
It was interesting that virtually everyone in the market seemed to be expecting a strong jobs report and my best guess for the reason is simply rationalizing the stock market's advance. As I said in my morning post yesterday, the stock market wanted to go up and whatever the numbers were it was going to do so. That sort of rationalization is a sign of euphoria. It is throwing your hands in the air, saying you don't understand the market's strength, and trusting other participants to be better informed about the future of the economy. That mindset will work just as well to justify lower prices.
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