T-notes finished at their highest level of the session. The short-end underperformed throughout the day ahead of supply in 3s, where USD 32bln was absorbed with reasonable demand and the yield stopping on the WI at the bidding deadline. The 10yr yield fell back below the psychological 1.90% mark after breaking higher post-FOMC last week. Mild curve flattening was seen, with 2/30s finishing down 2.3bps, and short covering was noted in the final hour of trade. 10s BEs trade down 1.5bps after TIPS outperformance of their nominal peers yesterday which saw BEs finished up by over 4bps. At the pit close T-notes finished at 131.27, up 8+ ticks.
Print 20:08, 08 Jan 2013 - Fixed Income - Source: RANsquawk
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