It was a generally quiet day for bond markets, though that wasn't destined to be the case at the open. Treasuries had weakened slightly overnight and the onset of domestic trading only exacerbated the weakness at first. 10yr yields briefly matched their highest levels in a week before a supportive technical bounce. MBS were also in weaker territory until a slightly weaker Consumer Confidence reading facilitated a return to yesterday's range.
The afternoon saw a gradual, almost flat move in the same positive direction. Some of the improvement has been attributed to S&P's downgrade of several European banks as well as volatility working its way through the Treasury complex relating to Apple's big corporate bond offering.
Considering the pace of movement though, assigning blame isn't really necessary (or even possible). Suffice it to say that rates found themselves above the center of the range this morning and moved back toward the center this afternoon. The same thing happened in reverse yesterday, but the data calendar should shake things up increasingly in the next 3 days.
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