Mid Day Update

October 31st, 2013 12:47 pm | by John Jansen |

The belly of the Treasury curve has taken a battering since the Chicago PMI number printed. The 2s 5s curve was at 97.5 prior to the number and is now at 102 basis points. The 5 year/30 year spread was at 234 basis points prior to the data and that rests at 231 currently.

Dealers with whom I conversed report end user selling. I would surmise also that dealers sold as belly paper is what dealers hold following this week’s auctions. And sadly they bought that paper at expensive outright levels and expensive levels on the curve.

Score this one a victory for Jack Lew and his taxpayers and a loss for dealer bonus pools.

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