Shorts were busy covering an oversold Treasury market at the open and hence overlooked a stronger than expected 4% surge in revised third quarter GDP and healthy data on consumer confidence and new home sales. The data failed to provide any support to stocks either, as profit taking was well entrenched. Gains were equally distributed across the curve.
The long end benefitted from some front running of month end demand, and from spurious talk of the Fed eventually buying coupons farther out the curve. The short end rallied in the face of Wednesday's two-year sale, helped by the plunge in stocks and some of the above Fed easing talk. The break of key resistance areas helped Treasuries extend gains.
Rolling out of December and into March contracts was also reported.