Treasuries End Lower

A surprising surge in home sales and rally in stocks held down Treasuries

Treasuries ended lower after much stronger than expected existing home sales data, which helped spark a rally in U.S. stocks. The retreat in Treasuries was mildly deeper than expected, says S&P MMS. The lack of impulsive losses, however, implies that another rally to challenge Friday's highs should develop in the short run. Despite the looming 2-year auction, the yield curve finished unchanged and confined to narrow ranges.

Looking ahead, Wednesday's Greenspan comments and Thursdays economic calendar are keys this week. However, failure of U.S. shares to garner any meaningful traction above 1120 for the S&P 500 index will keep Treasuries coiled for one more thrust higher near term before topping out.

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