Latin America jitters and the plunge in consumer confidence had the potential to liven things up, but the markets were in a perverse mood. Argentina and Brazil tension eased up on the day, removing impetus from the bid at the front-end of the curve. April consumer confidence fell sharply to 109.2 from 116.9, but stocks rallied initially before closing the red and bonds fell. Impact from the damp data was usurped by the Fed's cut last week, which was seen as an attempt to forestall further sharp declines in business and consumer confidence.
The curve steepener remained in place, with 2s/30s pushing past +160bp chart area, but mostly on residual softness at the back-end. The June bond closed 8/32 lower at 101-00, falling on its own sword after never really garnering any upside momentum. A variety of non-governmental debt was launched and priced, led by Fannie Mae's $5.5 billion re-opener. Bulls hid under the cover of options.