The 10-year note tested new highs. The approach of the 3.625% 10-year yield had many expecting convexity hedging (5.5% mortgages getting close to being refinanced). But this
failed to surface, so prices stalled amid profit taking. Rate lock sales vs. more corporate supply, in addition to balanced fund asset reallocations, pushed Treasuries lower.
The "last straw" was the PPI announcement, with some Wall Street analysts expecting a jump based on the surge February's import prices. Short covering moved prices back to neutral. The price of the benchmark 10-year note finished lower, pushing the yield up to 3.70%. From Informa Global Markets