Bonds Trim Losses

U.S. Treasuries were sent back toward the session highs as position-squaring continued while the upside was greased by a late slide in oil prices. Volumes remained light with a jump in size on the rally on news of the Cologne train station evacuation. The two-year continued to outperform, heading toward unchanged while the long bond remains the laggard.

The 30-year recently traded 3.142% from a 3.1667% high yield/low price midday. The 10-year is near 2.56% from a 2.5912% low, the five-year is near 2.044% versus 2.074% low and the two-year near unchanged at 1.2285% from 1.265% low.

Wednesday’s calendar has November existing home sales, which are expected to slide to 5.535 million from 5.600 million in October. But traders are looking out to Thursday’s big run of data with the third read on Q3 gross domestic product (GDP) seen bumping up to 3.3% from 3.2% in the second release and 1.4% from Q2. The November personal income and spending data are seen rising 0.3% each versus a 0.6% October rise in income and 0.3% in spending. November durable goods orders are expected to fall 0.4% following a steep 4.6% rise in October (revised from 4.8%), while the ex-transportation input is seen up 0.2% from 0.8% previously (revised from 1.0%).

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