Treasury Yields Drift Lower
Action Economics: Yields have drifted down from highs set overnight on the $2 bln BofA stake taken in Countrywide Financial, with the fairly benign reading on jobless claims not adding much to the mix. The more optimistic tone on the credit crunch overall has stolen some thunder from Treasuries, marking down the safety premium and flattening the curve, but many are still waiting for the other credit shoe to drop, which is encouraging dip-buying for now. The 10-year yield poked above 4.70% overnight, but has steadied near 4.68%. The 2s-10s spread has narrowed another handful of basis points to +44 bp -- nearly 16 bp inside wides last week.
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