Bonds Head Out Near Week's Best Levels

15:50 ET 10-Yr: +13/32..4.156%.. USD/JPY: 107.2670.. EUR/USD: 1.5621

[BRIEFING.COM]
Bonds Head Out Near Week's Best Levels : The bonds ran-up on the day, with the short end pulling the market along as stocks stumbled and oil barreled back better. The early bid came in on chatter over bond insurer troubles (and rate slashings) and held, with some mid-day pressure on position squaring, bouncing back nicely.

There was nothing on the calendar of note today but the week ahead has a run of potential tape-bombs, with FOMC, $30B shorter duration auctions and assorted data. The oil related meetings in the Mid East over the weekend may offer some headlines, but little of consequence is expected out of the gathering.

Traders have pulled out virtually all expectation of the Fed to pull the trigger on rates, but the market is geared up for toughened up inflation talk. The shorter maturities were able to get in about 23 basis point swings on the week, while the longer end lagged some.

The curve was back and forth all week, heading out steepened with the 2-10-yr yield spread at 128.5. The buck was embattled all day, suffering on rate expectations and got pushed out of the recent range on the euro, which was able to haul its way back through to 1.5650. The yen was able to get back to near 107.00 yen to the buck after a brief stint through 108.00 late yesterday.
Gold was bought most of the week on inflation concern, but went offered mid-session with spot now 901.42 (+2.95).

Crude held a bid on mid-east saber rattling and the sliding dollar, with the Aug contract now 135.15 (+2.55).

The week ahead will be fairly Fed-centric with the FOMC running Tues and Wed, and a high likelihood of assorted ex-Fedsters popping up to offer their rate opinions to the usual market talking heads.