Treasury Action: yields drifted lower.
Treasury Action: yields drifted lower over the course of the session with stocks in retreat, though there is some bottom-fishing on stocks emerging into month-end. For Treasuries the Barclays duration index extends out a healthy 0.12 years, which may help sustain a bid into the close. The 2-year yield has eased from the 2.285% area to 2.266%; the 5-year slipped from 2.687% highs to 2.65% lows; the benchmark 10-year retreated from 2.91% to the 2.87% area; and the cash bond yield toppled from 3.172% to 3.13%. The curve flattener has now pulled all yields under the waterline, ranging from 0.4-3.9 basis points lower along the curve as the long-end outperforms the short. The 2s-30s spread is 3.5 bp tighter at +87 bp. It will be mostly a festival of $156 B T-bill sales next week, followed by $62 B in 3-, 10- and 30-year coupon issuance a week later, which could give Treasuries a little breathing room for now.