But there was a burst of selling as traders factored in the upward revision to April retail sales. Sources noted leveraged selling in the bond, as well as rate locking in the 10s on the launch of the $1 billion Washington Mutual 10-year. The September bond's break of 101-03 (50-day moving average) added to the slide. Gains in stocks added to the pressure. But Treasuries turned around into the afternoon as technical supports finally held, as rate locks on 5s and 10s were unwound, and as stocks reversed course into the red.
A soft Beige Book provided further impetus for the bond's rebound, and for the late collapse in stocks, as the Fed's report outlined further erosion in the economy, with a few bright spots.