3:25 pm - Treasuries Continue Rally:

• The Treasury complex extended its gains for the week today, with the 10-year down 15 basis points since the close on Friday
• Yield check:

• 2-yr: -4 bps to 0.65%
• 5-yr: -3 bps to 1.58%
• 10-yr: -2 bps to 2.10%
• 30-yr: -1 bp to 2.68%

• News:

• Data Out Friday:

• February PPI (08:30 ET)
• March Michigan Sentiment (10:00 ET)

2:41 pm - Dollar Index Declines:

• The U.S. Dollar Index lost ground to every major but the pound sterling today, ending down 49 ticks (-0.49%) to 99.31

• Mark Carney said that there is no evidence of [deflation proper] in the UK, where wage growth has picked up over the past six months. He went on to say, there are several reasons why the dog (debt deflation) might have just been sleeping, and central banks need to be vigilant.
• He also said, While the MPC can be expected to look through one-off shocks, it may be appropriate to take into account persistent external deflationary forces arising from the combination of continued foreign low inflation and the protracted effects of sterling’s strength on the prices facing UK consumers if those forces were to intensify.

• That remark likely precipitated selling in cable, which continued throughout the day, ending down 75 pips (-0.75%) to $1.4858

1:06 pm - Auction Results:

• $13 billion 30-year auction (re-opening) (13:00 ET):

• The auction was met with light demand, given that the bid-to-cover was 2.18, lower than that of the past 7 auctions

• High yield: 2.681%
• Bid-to-cover: 2.18
• Indirect bid: 51.8%
• Direct bid: 11.6%
• Primary dealer take-down: 36.5%

• Previous 12-auction averages:

• High yield: 3.37%
• Bid-to-cover: 2.47
• Indirect bid: 45.7%
• Direct bid: 17.4%
• Primary dealer take-down: 38.6%

11:52 am - Auction Preview:

$13 billion 30-year auction (re-opening) (13:00 ET):

• Previous auction:

• High yield: 2.848%
• Bid-to-cover: 2.76
• Indirect bid: 49.80%
• Direct bid: 24.30%
• Primary dealer take-down: 25.9%

• Previous 12-auction averages:

• High yield: 3.37%
• Bid-to-cover: 2.47
• Indirect bid: 45.7%
• Direct bid: 17.4%
• Primary dealer take-down: 38.6%

11:30 am - DXY Nears Key Long-term Resistance Levels: The Dollar Index briefly touched the psyche level of 100, its highest mark since April of 2003. The Dollar Index strength has been wel documented but it is coming into some notable resistance levels here. This dates back all the way to 1991 with the one breakout rally dating back to the late 1990s with the Robert Rubin ‘strong dollar’ phase. Economic data this morning did not necessarily support the move as Retail Sales were weak. It is also notable that INTC lowered its revenue guidance, citing currency headwinds. This will be interesting as we prepare for next week’s FOMC meeting.

• The euro slipped to 1.0494 overnight but has been able to stabilize and move back to the 1.06 level. The EU and Greece have softened some of the headline rhetoric in order to ease tensions. The ECB also renewed its ELA extension to Greek banks which has soothed markets. Economic data was mixed with CPI numbers running in line to slightly higher than expected while the Eurozone Industrial Production number fell short of expectations.
• The pound is near the lows after seeing a brief rally to test the 1.50 level. Sterling has been under selling pressure as Bank of England members have turned a little more cautious on growth prospects the past week. 1.4894 is setting up as a key level of support for sterling.
• The yen remains weak against the dollar. Yen fell to 1.2168 but did not test its multi-year low of 1.2184 set back on December 8. This appears to be an inevitable test at this point.

11:11 am - Treasuries Still Green:

• Treasuries have settled into a range, with stocks holding onto their gains as well. The Dollar Index is still off of its high
• We’re still waiting on the $13 billion Treasury auction at (13:00 ET)
• Yield check:

• 2-yr: -2 bps to 0.66%
• 5-yr: -4 bps to 1.56%
• 10-yr: -4 bps to 2.07%
• 30-yr: -4 bps to 2.65%

TLT Closing in on Resistance:

Last Friday, we took a look at the chart of TLT, the 20+ year maturity Treasury bond ETF. The horizontal lines are the highs of 2008, 2011, and 2013. We noted that the ETF fell through the first two levels of support but held the third. In only 3 and a half days, we’ve traded most of the way up through the channel (green). It would be surprising to see us leave this channel now that we have traded back down to the lower level.

10:16 am - Treasuries Gain:

• U.S. government bonds are up, but off of their best levels of the session, having mostly given back their gains coming from a much-worse-than-expected retail sales report

• The headline number was -0.6%, well below the Briefing.com consensus of 0.4%
• The ex-auto number was -0.1%, below the Briefing.com consensus of 0.6%

09:10 am - Retail Sales Fall: