Bonds Rally Amid Threats in Middle East

U.S. troops were put on high-status alert, generating a safe haven for Treasuries. The stock slide also provided a lift

Treasuries posted a surprising rally on Friday with the September bond closing up nearly a point, albeit in fairly thin conditions. What was supposed to be a quiet range trade as players positioned for the upcoming FOMC meeting turned out to be anything but, as a combination of curve flattening trades, weakness in stocks, a safe haven bid, technicals, and short covering all combined to boost prices sharply, especially into the close.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.