Curve flattening and profit-taking on stocks helped the 30-year bond future resurface above water on Tuesday, though the front and belly of the curve had trouble digesting yet another flood of corporate and sovereign dollar issuance. Ten-year Treasury futures had fallen earlier in the session on a strong ISM services index. But they recovered as the stock market fell. Tony Crescenzi of Miller, Tabak in New York says the relatively odd reaction to the report exposes technical conditions that appear to be preventing a continuation of recent trends. He says a lack of followthrough is likely to be used as a catalyst to consolidate the overbought condition in stocks, and the oversold condition in bonds.
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