Wall Street Woes Boosts Bonds
Sketchy month-end conditions and a new September front-month contract on the bond future kept directional bets on the sidelines Wednesday ahead of key payrolls data Friday. Yet there was quite a lot of activity beneath the surface, with the curve flattening bowing to supply initially, then steepening back out, and agency spread narrowing. The front-end cheapened briefly into the $10 billion two-year auction and $20 billion cash management bill, but fund buyers were spotted on the dip. One shop was a buyer of 8,000 September 5s early on as well.
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