The Bond Column

Treasuries ended the week on their lows as Friday’s nonfarm payrolls beat produced heavy selling across the complex. Friday’s session saw the long bond lose close to three points as its yield jumped to 3.15%, and finished ar its highest level since January 24. Elsewhere, both the 3- and 5-yr yields fell to record lows at one point or another this week, hitting 0.287% and 0.696% respectively. Early week buying in the 10-yr space was unable to drop the yield below its 1.80% support level as it finished the week higher by 8 bps at 1.953%. Next week’s data slate is light, a scenario which has generally been unkind to the Treasury complex.

The yield curve saw little change this week as the 2-10-yr spread widened 1 bp to 169.5 bps.

There were no auctions of note.

The Week Ahead

There is no data on Monday.

Tuesday’s data is limited to consumer credit (15). Treasury will auction $32 3-yr notes.

Wednesday will see just the weekly MBA Mortgage Index (7). Treasury will hold a $24 10-yr auction. SF’s Williams will speak in San Ramon, California on “The Federal Reserve and the Economic Recovery.”

Thursday’s data includes initial and continuing claims (8:30) and wholesale inventories (10). Treasury will auction $16 30-yr bonds.

Friday will see the trade balance (8:30), Michigan Sentiment (9:55), and the Treasury budget (14). Fed Chairman Bernanke will speak in Orlando (12:30).