In the Treasury market, Traders said the positive action in stocks weighed on Treasury prices. But the debate continued over whether Treasury yields are responding to a weakening economy or something else.
The consensus view is that investors were short Treasurys at the beginning of the year, betting big that rates would rise. But when rates fell instead, shorts were forced to cover and investors had to reposition, driving yields lower.
"I think many are quickly dismissing the move in Treasurys as a kind of a technical factor, nothing fundamental. On one hand that does seem right. On the other hand, it concerns me that we're explaining away too much," said Greg Peters, senior portfolio manager at Prudential Fixed Income.
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Peters said the corporate profit guidance has not been that positive, and the Fed is paring back bond buying as the European Central Bank appears set to make a policy move. "You have China slowing. You have inflationary and disinflationary forces asserting themselves," he said.
Philadelphia Fed President Charles Plosser speaks at 12:30 p.m. EST on the economic outlook, and New York Fed President William Dudley speaks at 1 p.m. on the outlook at a luncheon in New York.