Price action in the Treasury market continues along the trend I discussed on Wednesday. Early in the day on Wednesday, the Treasury market tried hard to rally, pushing about 1/4 point higher. But as the day past, the rally faded and finished the day essentially unchanged.
This followed through on Thursday. The market opened up slightly weaker, and it pushed even lower as the day continued.
Granted, we're talking about relatively small moves. But its reinforcing that there is no support for prices here. The small rally on Wednesday was met by selling and the weakness on Thursday was reinforced.
Corporate bonds moved tighter on Thursday. My sense is that this was a pause, not an actual reversal in the trend. However, if we get a few days of strength in the corporate market, it will force real money account to come in, and that will push spreads considerably tighter quickly.
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