Treasuries Inch Higher

Bonds rose slightly in thin trade as the markets digested a better-than-expected manufacturing report

After pulses were sent racing by a better-than-expected manufacturing report Tuesday, it was hard to find one on Wednesday. Treasuries flatlined across the coupon curve and visibly on the December bond was just below the 104-handle all day, mindful of payrolls ahead (only claims and non-manufacturing data will be released on Thursday). Longs were clearly burnt Tuesday by the violence of the downmove and were rightly reluctant to trade the equity washout on Wednesday, which reversed into the close. About the only interesting microscopic divergence was the 10-year note underperforming (by a tic) on upsized corporate supply. There was a doubling of a pair of offerings -- Sara Lee to $1.25 billion and General Motors Acceptance Corp. (the finance arm of the automaker) to $6 billion.

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