Weak Orders Data Lifts Treasuries

The non-manufacturing NAPM survey fell to its lowest level since inception; hedge fund unwinding also caused a price run-up

A combination of soggy data and hedge unwinding conspired to lift Treasuries on Tuesday, which helped the belly of the curve edge out the tails. The weak April factory orders result of -3.0% was tipped by a comparably soft durables report revealed in the last week of May, but March's result was sliced in half to a revised 0.7% as well. Non-manufacturing NAPM survey was especially weak, at 46.6%, falling to its lowest level since inception in 1997 and demonstrating the breadth of the slowdown. Yet, stocks rallied after shrugging off the data in favor of a couple of brighter technology reports (Xilinx and Comverse).

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