Treasuries Finish in the Red
In light of the Easter Holiday and subsequent market closures in both London and Europe, Treasury trading was light and lacking in liquidity. Prices opened under pressure, a follow-through from the selloff in Tokyo as the "safe-haven" terror related trade began to unravel.
In addition, hawkish comments by Fed Parry (though not a voting member and about to retire, with Janet Yellen taking his place), regarding rates: He said the fed funds rate should be at 3.5%. His comments further pressured Treasuries.
Flows were light, but biased towards the sellside from speculatives and dealers. Option flows were mixed, with call buying by a mortgage servicer by mid-morning, stemming some of the losses. But past noon, retail liquidations of 5-year and 10-year notes pulled prices lower. But the magic 4.25% held again, so some speculative short covering helped prices recover, though only barely.