Technicals also weighed, with the March bond's corrective rebound faltering ahead of 103-25/29, setting up a cascade of stop loss selling below the 103-handle down to 102-15. Prices were vulnerable to the equity rally and churning activity set in motion by predictably ridiculous Fed reports. The first version claimed Greenspan was prepared to signal or pull the -50bp trigger during Thursday's testimony. Then an afternoon follow-up reckoned -25bp would do just fine on Jan-31, thank you.
Shame, the day started productively with a Bank of Canada rate cut, a 2pt CRB drop, rate lock unwinds on corporate supply, and a smattering of damp second tier retail data. Fed's McDonough and Guynn played down credit/systemic risks.