Treasuries End Higher
It was a quiet, thinly traded session, a reprieve from the volatility seen all week. Treasuries finished higher following Greenspan's remarks that the timing of an interest-rate cut is unpredictable. Fed Gov Bies said she's "cautiously optimistic" regarding job growth.
PPI was higher than expected, but not off the charts, as had been the case for CPI. Initial jobless claims showed an improvement in labor, but not by enough to force the Fed's hands. So Treasuries remained choppy, and in a tight range, with bids, helped in part by rate lock buying, vs. a couple of large corporate deals, and short covering.
Retail flow was light, but slanted towards the buyside, concentrated mostly in 10-year notes. Option flows made up the balance of the flow, but that was also mixed. Eurodollars saw huge buying in EDZ -- linked to a large short being covered. Most of the action in that pit was linked to short covering, with hedge funds and Far Eastern players all on the buyside. Swappers were sellers. Late session, retail buyers moved prices back up to the highs.