Treasuries Slightly Higher
Action Economics: Treasuries maintained a quiet bid into month- and quarter-end, in tandem with global bonds, helped by modest declines in equities. Concerns over growth fallout to Asia and Europe from the credit crunch and the weaker dollar contributed to the profit taking in stocks, especially amid weaker than expected European data. Meanwhile, Japanese accounts were reportedly picking some duration, giving the Treasury curve a slight flattening bias, though steepening pressures seemed to return in European action, boosting the 2s-10s gap out to 62 bps. Today's U.S. calendar is heavy as we close out Q3. On the docket are key data on personal income and consumption, along with the figures on the core PCE deflator. Also slated are the Chicago PMI, construction spending, and the final reading on consumer sentiment from the Reuters/University of Michigan index.