Stock Strength Pressures Treasuries

The recent safe-haven bid evaporated as investors returned to equities. American Home Products scaled back its private debt sale

Treasuries continued to lose ground Monday, with the long bond falling 27/32, as the Dow extended its gains from Friday. Trading was rather uninspired, though, with dealers generally content to unwind the recent safe-haven bid. Action on the curve was choppy. The short end underperformed early on as Wall Street's solid gains supported a flattening trade. But ironically, the curve actually took on a steepening bias into the afternoon as sellers of the back-end dominated.

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