Treasuries Skid

Yields surged after China revalued its currency and Greenspan repeated his testimony to the Senate

From Action Economics and S&P MarketScope: Treasuries finished sharply lower Thursday after China said it would no longer peg the yuan currency to the dollar.

In a roller-coaster session, Treasury yields finished sharply higher, contributing to the notion that the bears were finally getting their moment in the sun after the Chinese revalued the yuan by 2.1%, abandoned the peg, and left the door open to further moves.

A repeat of relatively hawkish Fedspeak from Greenspan before the Senate and evidence in the FOMC minutes that his views were shared provided additional impetus to the upside after a fresh spate of botched London underground bombings briefly boosted the terror premium.

Plus, FOMC minutes from June meeting mentioned the need to be alert for signs of inflation. The 10-year yield rose to 4.28%, its highest since early May.

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