Treasurys Move Higher
Tuesday's release of the minutes from the May 3 FOMC meeting sparked short covering in the Treasury market, as the yield on the 10-year note neared 4%. More buying emerged from hedge funds, with higher prices then prompting technical traders to buy. A huge corporate calendar helped stall the rally, with retail profit taking at the highs also seen.
But Treasuries pulled back further on another round of retail profit taking. But Fitch's downgrade of General Motors debt to junk status sparked brief safe-haven buying. Market players who got short ahead of the FOMC minutes on bets for hawkish headlines scurried to cover as the minutes gave no hints of any policy change, but possibly "mini-stagflation". So the long end led the higher move at the close.
From Informa Global Markets
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