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. size.