The March bond stumbled below 103-06/10 congestion, its weakness set in motion by early dealer sales of 4K calls on the bond and another 4K on March 10s. The front end of the curve ended under water, but did not ship on nearly as much as the long end. There were reports of a FOB reversal (5s for bonds) on a long position set Friday by an Asian account, but this went against the grain of today's business.
Leading indicators at -0.6% flashed another warning sign about a pending recession, but stocks remained ambivalent in front of Greenspan's budget testimony Thursday and after Dell's profit warning. The Bush administration kept California at arm's length, saying the state had to find a way out of its own energy crisis, though Bush vowed to open the Arctic to drilling.