The cash yield curve steepened back out, though all maturities benefitted handily, also supported by the sharp 6.7pt drop in Chicago PMI to 51.5%. The best the Fed's Beige Book regional economic survey could say about the economy was that it "expanded modestly."
Stocks traded lower for the bulk of the session, though proving more thick-skinned by the close. Outright flows were relatively subdued in the morning, but the front-end particularly got a boost after the Treasury confirmed rumors that the refunding would top $40 billion, skewed a little higher towards 10-year notes than expected.
Bond fund manager Bill Gross of PIMCO ranted against risky corporate bonds, which may have bolstered the underlying strength of Treasuries. The Sep bond closed 1-8/32 higher, near 106, while the two-year note and 30-year bond spread widened back out eight basis points to +306 basis points. The dollar index appeared to decouple from stocks, holding on to week highs above 107.