After a fresh flurry of data Thursday, longer-dated Treasuries finished mostly where they began, while shorter maturities were dented by further curve flattening and firmer stocks.
Treasuries extended their record-breaking run on the deep print lower by the producer price index (a 0.9% drop in the core rate) and were helped higher again by the still-weak Philly Fed business index (-4.8 in April vs. -8.8 one month earlier). The report did not match optimistic expectations following a sharp rebound in the Empire State index (+10.6 vs -20.2). Industrial production also declined by 0.5% in April. On the positive side, business inventories shrank (+0.4 vs +0.7), as did weekly jobless claims (-13K to 417K).
The June bond closed up 1/32 at 118-14 after venturing as high as a record 119-05. The 2s-30s spread plunged to +300 basis points for an 11-bp narrowing before riding back out to +304 bp.
From MMS International