Data Stings Bonds

More positive production data -- suggesting a bottoming in manufacturing -- and dollar weakness kept Treasuries in check

Better than expected data and weakness in the dollar kept pressure on Treasury prices Wednesday, albeit in an uninspired, corrective session where shorter coupons underperformed. The two-year and 30-year curve continued to back away from new eight-year wides (+183.7 basis points) reached on Monday, narrowing to the +173 basis point area. Flows remained relatively light, however, and typical summer malaise left buyers scarce.

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