Month and quarter-end conditions, along with the approaching holiday weekend, also took a toll on long curve positions which were hacked back. The 2s/30s spread collapsed from +161 basis points late Wednesday to +144 basis points, while the September bond ran out of gas after breaching 102-10 Wednesday highs, then tumbled back below 101-00. 2-year yields backed briefly to 4.25% -- a 50-basis-point spread with Fed funds.
Minutes of the May-15 FOMC also exposed a dissenter (Hoenig) to the 50-basis-point cut back then and a broadening gravitation towards a shift back to a neutral policy bias. Microsoft dodged a break-up bullet as its case was remanded to a lower court, but abuse of its monopoly position was confirmed.