Treasury Action: that was bullish while it lasted
Treasury Action: that was bullish while it lasted. Treasuries shed all of their ECB-inspired gains and then some, and turned 1 to 2 bps cheaper before dipping again. The 2-year yield was 2 bps higher at 1.693% after hitting an intraday low of 1.627%, but has slipped back to 1.668%. The 10-year was up 1 bp to 1.75% versus 1.66%, but is back at 1.732%. European bond yields have come off their lows as well with the Bund bouncing to a high of -0.553% after richening to -0.653%; it's returned to -0.557%. Italy's BTP remains the outperformer, 14.5 bps lower at 0.821%. While Draghi more than delivered on the rate cut and QE, there were some features he didn't discuss. Meanwhile, attention will turn to tomorrow's retail sales data ahead of next week's FOMC decision where the markets have trimmed bets on the potential for aggressive action.