Treasury Action: yields pulled back from highs
Treasury Action: yields pulled back from highs despite the drum beat of firmer data, which continued to roll out from Chicago PMI and NAR pending home sales on top of earlier ADP and personal income gains. Fresh highs on stocks and the surge in crude oil is placing a floor under yields, while month-end index duration forces later in the session could keep them capped. The 2-year yield stalled over 1.135% before easing to 1.12%; the 5-year probed 1.865% before tipping over to 1.84%; the 10-year yield probed 2.41% then eased to 2.39%, well up from overnight lows below 2.30%; and the cash bond yield cleared 3.087% before easing to 3.05%. The curve steepened with the long-end pacing the move and the short-end lagging as yields rise 2-10 bp along the curve. The 2s-10s spread widened 5-6 bp to +126 bp and the 5s-30s is out 4 bp to +121 bp. Though the 8% surge in oil prices boosted yields overnight with the OPEC deal headlines, month-end forces may slow the rise in yields for now with the big index extension into the close.