Combined with a Greenspan speech scheduled Wednesday afternoon and a late recovery on stocks, this kept bonds beaten down. The June bond attempted to clear 99-20 congestion early on, but skulked back below 99-00 to close down 1/32 at 98-29. The two-year note and 30-year bond spread widened five basis points to 219 basis points.
Supply kept the market a little unsteady, as did general narrowing of spread product at the long-end. A rebound in the Richmond Fed services indices also took some starch out. Several corporate and agency deals queued up and a jumbo $6.6 bln GECC multi- trancher loomed over the market. Fed Governor Gramlich opaquely questioned whether or not the U.S. had experienced a recession.