Treasuries Finish Solidly Higher on Stock Weakness
Treasuries recovered from supply drenching as geopolitical considerations continued to impact and President Bush's comments on Iraq boosted the safety bid.
Bonds were jumpstarted prior to the New York open by a surprise quarter point rate cut by the Bank of England. More hawkish rhetoric from North Korea provided further rationale to hold Treasuries, while traders digested the global reactions from Powell's U.N. address Wednesday.
Meanwhile, the growing threat of war made for another negative day on Wall Street, which in turn supported Treasuries through the session. The Dow was in the red most of the day, though it halved its losses into the close to finish -55 at 7929, while the Nasdaq held on to 1300.
A number of large corporate deals were launched and priced -- the jump in the pipeline and apparent ease of distribution reflected good demand. Stops were triggered on the ascent, to push the March bond to its highs, nearly a point on the day. Pre-employment position squaring was evident late in the day, with some feeling that the data will print on the weaker side of the +68,000 concensus. Neither a 0.2% drop in productivity, nor a 4.8% jump in unit labor costs hurt bonds.