A weaker labour market usually means less pressure to raise rates, so traders push out hike expectations. When expected future policy rates fall, bond yields tend to fall too — and because bond prices move inversely to yields, existing bonds rise in price. The short end (like the 2Y at 4.25%) is most sensitive to Fed expectations, so it typically moves first and most on jobs data.

The yield curve plots yields across maturities. When jobs data softens, front-end yields (driven by Fed expectations) fall faster than long-end yields (driven more by growth and inflation expectations), so the gap widens — a 'bull steepener'. Longer bonds have more duration, meaning their prices swing more for a given yield change, so a beginner should note the 30Y is the most price-volatile piece if long yields also move.

A credit spread is the extra yield investors demand to hold corporate bonds over 'risk-free' Treasuries. A tight 78bp spread means investors feel confident about companies repaying debt, so they accept little extra compensation. If risk sentiment sours, spreads widen — corporate bond prices fall relative to Treasuries — so beginners watch spreads as a gauge of credit stress.

CLOs bundle floating-rate corporate loans, so their coupons reset with short-term rates — that means very low duration and little price sensitivity to yield moves. When investors are unsure whether rates rise or fall, floating-rate assets are attractive because they largely sidestep the price hit that fixed-coupon bonds take when yields rise. The trade-off is credit risk: these are lower-rated loans, so spreads and defaults matter more.

Government bond markets are globally linked — when US yields fall on soft data, UK gilt yields often follow because investors reprice the whole 'risk-free' complex together. Lower yields mean higher gilt prices (the inverse relationship), and longer-dated gilts, with more duration, gain the most for a given yield fall. A softer dollar can also make overseas buyers more comfortable holding non-US bonds like gilts.

Rising oil prices tend to lift inflation expectations, and inflation is the enemy of fixed-coupon bonds because it erodes the real value of their fixed payments — so higher oil can push yields up and gilt prices down, working against the jobs-driven rally. Beginners can think of it as a tug-of-war: soft growth data pulls yields lower, while energy-driven inflation risk pulls them higher.