From Standard & Poor's Equity ResearchAction Economics: Dip buyers provided some support to U.S. Treasury securities overnight after yields climbed to their highest levels since the beginning of the month. Technical buying was reported as the 10-year tested 4.70%. A rebound in EGBs in response to weaker than expected data and the advent of the weekend enticed buyers as well. Asian central banks were reportedly picking up 10s. Shorts also covered especially after heavy mortgage servicer selling yesterday. Some better receiving interest was also noted in 10s.
Sources also noted the slightly firmer dollar and belief it won't be a one-and-done from the Fed added to the positive tone. Curve steepeners remained the play, though it was from the bullish side today, with shorter dated instruments outperforming. The 2s-10s spread widened through 61 bps and is out from 40 bps since the start of the month. Today's calendar is void of data but heavy on Fedspeak with Mishkin, Kohn, Plosser and Warsh.