The 2-year note gained 5/32 to probe towards 3.9% yield, while the September bond closed down 1/32 at 102-27. There was persistent call and call spread buying on Euro$ futures, which was rumored related to hedging mortgage refinancings. December Euro$ probed 96-21/22 congestion. The coupon curve steepened to test +167 basis point July wides after malingering around +160 basis points for the last couple of sessions.
Tame 0.9% employment costs data, the 2.0% durables plunge and an auto retooling that distorted 366,000 claims were generally bullish, while the $1 bond buyback was overlooked.