Treasuries Finish Higher after Grinch Steals Durables
The front-end of the Treasury curve powered ahead Tuesday to round out a short pre-holiday session on Christmas Eve, driven by a combination of the rising war premium (Iraq and N. Korea), disappointing durables data and the Treasury going cap-in-hand to Congress for another increase in the debt ceiling. Weekly retail sales data was unremarkable, adding support, and volatile November durable goods orders confounded expectations of a 0.6% gain by falling 1.4% and October data was revised sharply lower as well. This prompted MMS to lower the bar on fourth quarter gross domestic product estimates to 1.3% from 1.7%, a view which seemed to be shared by the bond market.
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