Treasuries Finish Mostly Lower

Prices fell on position squaring ahead of Friday's employment data

On Thursday, position squaring ahead of employment data, and the U.S. dollar, sparked choppy trading. Prices opened softer, and again, there was no foreign-exchange linked buying, but profit-taking took hold instead. As the European Central Bank and Bank of England left rates steady, further dollar pressure evoked intervention speculation.

In addition, the weekly jobless claims bounce sparked a bid as well, but the uptick stalled as trader booked profits. The see-saw price action persisted. Prices moved into the black on a huge Asian Corporate Bond 5-year buying. Again the uptick lured profit taking. Hedge funds booked major profits in Eurodollars.

Chicago Board of Trade option trades reflected risk adjustments as volumes fell. A "sloppy" TIPS auction and a misinterpreted story about the Ministry of Finance and Bank of Japan sale and and repurchase of Treasuries sent prices lower. But the article was actually a plus for Tresureies, and prices were back in the black by the close.

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