Treasuries End Modestly Higher

Treasuries ended mostly flat after advancing earlier in the day on the disappointing consumer confidence report

Treasuries got a boost on weaker-than-expected consumer confidence, and although there was a retracement, prices were well bid into the close. The 87.3 confidence reading (vs. the prior 96.4) was enough to squeeze shorts, bringing cash 10-year notes briefly through 4%. A coupon pass from 8/12- 2/26 supported prices in the back end, but a seller of 10-year notes at the 99.30 level brought prices lower.

Stocks turned positive, taking the front end off highs, but there was enough interest to keep the basic bid intact and the pop in stocks soon died. There was selling in the afternoon at the lofty levels, but that didn't really diminish the appetite for bonds, and prices moved back up into the close.

The pit was dominated by spread trades as June becomes front-month on Thursday.

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