Treasuries Climb as Stocks Stumble

Bond buybacks and early stock weakness sent longer-dated issues sharply higher

Treasuries consolidated their gains on Thursday, after a buffeting from data, emerging market jitters, supply and curve activity. The combination of the larger than expected $23 billion two-year auction for next week and the $1.25 billion bond buyback Thursday and early stock weakness sent the long-end sharply higher. Yet the front-end struggled under water for most of the session as dealers refused to let political and social chaos on Argentina through them off the scent of the curve flattening trend. The resignation of the Argentinian government and unrest did not spill over too heavily on the rest of Latin America, though worried comments from the U.S. and IMF over the country may have helped short maturities pare losses by the close.

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