Treasury prices made a huge move, broke through resistance levels on an exuberant push higher, only to give back most of the gains by day's end. Tame PPI and much weaker-than-expected University of Michigan consumer sentiment sent all sorts of players into a buying frenzy.
Hedge funds bought cash 10-year notes, front-month eurodollars and 2-year and 5-year futures were gobbled up by commodity traders and tech guys. A Japanese bank was a featured buyer of 5-year notes, along with other overseas buyers. Shortcovering was rampant and mortgage-related buying was strong.
But after things settled and day traders exited the market for the day, prices began to drift lower. The front of the curve, which had gotten too overdone to the buyside, began to come off, eventually flattening the curve into the close. Nevertheless, with the Fed clearly on hold, there is still a positive sentiment to the mark.