Another data-free session was dictated by external factors, including stocks, supply, the Mid-East and the dollar. The curve held its steeper profile as the fright bid set the early tone. A Brooklyn Bridge bomb scare was later proven erroneous, but initially walloped stocks and lifted Treasuries.
The Bank of Japan's dollar purchases reputedly totalling some $2 billion were also rumored supporting the front-end, where they were most likely to park any unsterilized funds. Hostilities in the Mid-East and Indian sub-continent kept any intraday declines on Treasuries modest, despite the steady drum beat of corporate issuance (Disney, JPM-Chase, Cintas, Deutsche Telecom, etc.).
A record $27 billion 2-year note auction was announced as well, but the geopolitical cross-currents more than cancelled out any supply angst. The June bond closed up 18/32 at 101-25, while the 2s-30s yield gap widened 2 bp to +245 bp.
April durable goods orders are likely to rebound Thursday, while the first quarter GDP should be revised up Friday, but the holiday weekend will keep risk aversion elevated.