The first anniversary of September 11 was marked with solemn memorials and tributes. It was also uneventful, terrorist-wise. Consequently Treasuries unwound all of Tuesday's 'orange alert' gains in somber trading and then some, with the yield on the two-year note rising more than 10 basis points in yield intraday, while the long bond climbed 7 basis points.
With no terrorist events and no data, Treasuries tried to focus on equities. Though Wall Street delayed its opening until the conclusion of the memorial services, futures were open and their solid gains further depressed bonds. Equities pared their gains in the afternoon after the Fed's Beige Book said growth had slowed in recent weeks.
The erosion helped put a floor under Treasuries and bonds rebounded modestly into the early close. Traders are starting to turn their attention to Thursday's events which include Greenspan's testimony to the House Budget Committee and the President's appearance before the U.N. General Assembly to present his case against Iraq.