There wasn't anything on the data docket to speak of Monday and the event horizon was crowded with Fed Chairman Greenspan's speeches Monday night and once again Tuesday. This left nearly all assets in a trance, even as equities slipped back into a coma thanks to further telecom sector warnings from Ericsson, Lucent and WorldCom.
Outright flows were modest and option activity was mostly been driven by calendar rolls. One Mid-West bank was heard buying 5,000 September 106 calls on 10-year notes and selling 10,000 June 106's. Volume generally traded flat-to-weaker after Friday's sell-off as Fed tightening bets get deferred into the future.
For most of the session the June bond bumped its head against 100-20 resistance where two large dealers had been on the offer, but later broke through to close up 6/32 at 100-24 after another downleg late on stocks. The two-year note and 30-year yield spread was rock steady around +235-236 basis points and Coca-cola Enterprises priced $1 billion in two-year notes and five-year notes. But this supply had little direct bearing on the curve, which is skewed nominally for curve flattening, with a $1.5 billion bond buyback Tuesday and a $25 billion two-year auction Wednesday.