Treasury yields declined and prices picked up, following the wayward lead of stocks, which were knocked by the analytical downgrades of IBM and Qualcomm, as well as the fallout from UAL's bankruptcy and concerns about weather-stymied holiday sales.
There were reports of light curve activity in favor of the belly, with a FIT (5s for 10s) buyer and some leveraged and system account positioning on bonds. The March bond closed up 19/32 at 109-26, while the two-year note and 30-year bond spread closed virtually unchanged at +309 basis points.
President Bush heralded the Treasury appointment with the call for a fresh focus on reviving economic growth, seemingly alluding to upcoming stimulus/tax cut plans. Dollar policy remained opaque, with the Treasury understandably declining to say whether it had been altered. The lack of data today and approach of a likely bland FOMC meeting Tuesday otherwise kept trading volumes at low ebb.