Bonds down, led by longer end, under follow through selling after Wednesday’s slide

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•Bonds down, led by longer end, under follow through selling after Wednesday’s slide
•Volume moderate as calendar roll finishes up; 171k June 10s trade against 31k March by 06:28 EST
•Better selling of belly on way down from Asia, other flows more mixed but light
•USTs underperforming EGBs by 0.5bp in the 10yr maturity compared to the previous London close.
•10s trade in a range of 1.986% and 2.010% overnight.


•The tactical bias is defensive as Bernanke puts burden of proof on market bulls.
•Look for a 2.06% to 1.96% range in 10s.
•The strategic bias is flat, but anticipates next trade will be to the short side.
•The curve bias is flat, but favors fading the belly over the wings.











•08:30 Initial Claims (wk Feb 25) (mkt 351k, prev 351k)
•08:30 Continuing Claims (wk Feb 18) (mkt 3.400 mln, prev 3.392 mln)
•08:30 Personal Income (Jan) (mkt +0.4% m/m, prev +0.5% m/m)
•08:30 Consumption (Jan) (mkt +0.4% m/m, prev 0.0% m/m)
•08:30 Core PCE (Jan) (mkt +0.2% m/m, prev +0.2% m/m)
•ICSC Chain Store Sales (Feb) (prev +2.7% y/y)
•10:00 Construction Spending (Jan) (mkt +1.0% m/m, prev +1.5% m/m)
•10:00 ISM Manufacturing Index (Feb) (mkt 54.5, prev 54.1)
•Light Vehicle Sales (Feb) (mkt 14.00 mln, prev 14.18 mln)

•08:00 FRB Cleveland’s Pianalto (voter, moderate) to speak on national, regional growth
•10:00 Fed Chair Bernanke (voter, dove) semi-annual monetary policy testimony before Senate Banking Cmte
•10:30 Fed Governor Raskin (voter, dove) on the economic outlook
•12:30 FRB Atlanta’s Lockhart (voter, moderate) on the economy and banking


•11:00 Treasury announces 3- and 6-month and 52-week bills (e: $33/31/27 bln)
•Credit Suisse, 3-yr covered; BAML/CS?RBS/SG; m/s 110bp area

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