Treasuries Slump on Data, Stocks

A run of strong economic reports and a renewal of the equity rally weighed on the market

Treasuries recoiled on the eve of Thanksgiving on Wednesday, driven sharply lower by a feast of stronger economic data that helped all major stock indexes hit fresh highs for the week and the Nasdaq to a 5-month high.

The coupon curve initially flattened ahead of the 2-year note auction, but later steepened as losses at the long-end outpaced the front. Two-year yields backed significantly higher over the past 24 hours, which helped the $27 billion auction go smoothly and provided some relief by midday.

Yet Treasuries suffered further as the shortened pre-holiday session and asset allocation into stocks drove prices sharply lower. Data standouts were jobless claims (-16K), durable goods (+2.8%) and Chicago-PMI (54.3).

The Treasury market will be closed for the Thanksgiving holiday. Friday's session will warp up early, at 2:00 p.m. ET.

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