The Treasury market suffered from an extreme bout of lethargy Monday and the 30-year note closed about 10 ticks lower at 98-20 (5.467%) thanks to buyer apathy. Though stocks remained the primary focus, a choppy but also quiet equity market provided no real direction for bonds. A steady dollar was also uninspiring.
An unexpected 3% decline in July existing home sales also failed to excite. There was a fractional uptick in Treasuries on the headline, but the still healthy pace of 5.17 million put a quick halt to the move. Furthermore, the September bond's failure to penetrate Friday's congestion at 105-04 and a gain in stocks contributed to the contract's weakness through the session.
What little action there was in the bond pit was largely a function of roll trades as December becomes front-month later in the week. Sources reported both selling and buying in the September/December spreads. The Treasury's bill auction was uneventful, and there was no reaction to the Congressional Budget Office's downward revision to its budget estimates. Traders are looking ahead to confidence and revised GDP data, and ultimately the long weekend.