Bonds See Late Boost as Stocks Fall

U.S. Treasuries were chopped around early Tuesday, eventually stalling in range trade before getting a minor boost into the close as stocks tumbled. A light calendar showed a lower-than-expected New York manufacturing report while Federal Reserve officials offered no new news. Traders were looking out to Wednesday with the consumer price index (CPI) data, which is expected to show a 0.3% increase on the headline and 0.2% on the core, ex-food and energy input. Midweek highlights also include production and housing data along with a late-day policy speech from Fed Chair Janet Yellen.

The 30-year went out near 2.93% from a low yield/high price at 2.908% and 2.977% close Friday. The 10-year settled near 2.325% from a 2.3085% high and 2.38% Friday. The five-year closed near 1.825% after a rally to 1.806% and 1.884% close. The two-year closed near 1.155% from an early 1.135% high and 1.193% Friday.

The curve trade ended mixed with the yield differential between the two- and 10-years tightened to near 1.17 from 1.18 plus Friday while the spread between the five- and 30-year yields steepened slightly to 1.10 from 1.09 plus.

San Francisco Fed President John Williams is scheduled to speak late Tuesday at an economic forum at 6 p.m. ET with a follow-up Q&A.

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