The September bond topped out at 101-23 and eroded much of Tuesday's gains, to close 8/32 lower at 101-02. Fannie Mae launched $2.5 billion in 5s and 10s, though a handful of others non-governmental issues priced today (Halliburton, EOP and American General). The market also digested a $5 billion TIPS auction.
Stocks generally idled ahead of earnings from Motorola and Yahoo. Global advisor rumors on the strong dollar were followed up with Treasury confirmation of that mantra, easing some pressure on the unit. A Japan bank buyer of the Fed funds curve helped boost contract odds of a 25 basis point cut in August to 80%, but this may have been portfolio liquidation.