Prices popped on the softer-than-expected personal-income data.
Traders are also bracing for Treasury's refunding announcement tomorrow. The Treasury is expected to present a $54 billion package that includes $24 billion in 3-year notes, $15 billion in 5-year notes, and $15 billion in 10-year notes.
Due out tomorrow are reports on June Factory Orders, which many economists see up 0.5%, and July Nonmanufacturing ISM data, which many see up to 61.5 to 62.0.
Earlier, Treasuries were lower as safe-haven trades reversed following reports suggesting that a terror plan in New York, New Jersey, and Washington was old.