Both Italy and Germany reported higher than expected unemployment rates, with the former showing the highest reading since 2000. That means more economic pain is likely to come and is Bond friendly. The ADP Report, which provides a read on private sector job health, showed an anemic 119,000 private sector job gains. All recent economic indicators point to a slowing economy and as we mentioned this could stir rumors of QE3. Bonds are testing all time highs and if they can break through resistance rates may hit all time lows, see chart and blue trendline.