Treasuries opened lower on the weaker dollar, which sparkednegative sentiment overnight as oil surged. On the New York open, fresh short positions pushed prices lower, then technical selling in midmorning trade pushed down prices even further.
But Greenspan headlines suggested paced rate hikes in light of his view of low inflation, and Treasuries erased their losses in a flash. As it turned out though, the headlines weren't current; they were a part of a May 14 letter to Senator Sarbanes. So as quick as prices popped, they fell.
Oil prices fell sharply on profit taking before tomorrow's OPEC meeting, which is expected to raise output. Prices plunged more than $2 to the $40 level. This, in turn, pressured Treasuries further, so not even massive explosions at the U.S. Kirkuk airbase in Iraq had a market impact.