Prices of Treasury coupon securities are registering, on balance, modest changes in overseas trading. The massive wall of liquidity sloshing through the market has driven short rates lower while the longer maturities are unchanged.

Against that background, the yield on the 2 year note has edged lower by 2 basis points to 0.68 percent. The yield on the 3 year note has declined 3 basis points to 1.20 percent. The yield on the 5 year note has slipped 1 basis point to 2.14 percent. The yield on the 7 year note has also declined a basis point and rests at 2.85 percent. The 10 year note and the Long Bond are unchanged in yield and are currently at 3.33 percent and 4. 28 percent, respectively.

Prices of Treasury coupon securities have posted modest gains today but have retreated from their best levels as the 10 year note flirted with the 3.30 level which has acted as a barrier in the recent past.

I do not speak to often of the T-bill market but yields in that market continue to collapse. In one recent conversation, a market participant noted that bill yields are negative out to February. There are a couple of factors at work here. There is a massive wall of liquidity, a pile of cash which needs a home. That is driving yields lower.

Prices of Treasury coupon securities are registering virtually no change in overnight trading.

As I peruse the news, there is not one story which jumps out and grabs me as particularly pithy. And I guess I am not alone as the US bond market manifests virtually no movement.

Prices of Treasury coupon securities have sagged in overnight trading. As far as I can tell there was no piece of news or data which moved the market lower.

Equity markets in Asia declined modestly while European markets are posting modest gains. The last time I looked it appeared the US equities would open with very small gains.

Prices of Treasury coupon securities have posted modest losses in overnight trading as the bond market surrenders some of the chunky gains achieved yesterday in response to the Bernanke papal bull. That proclamation was a solid recitation of a litany of reasons why the funds rate is likely to remain low for a very long time.

The yield on the 2 year note has increased 2 basis points to 0.78 percent. The yield on the 3 year note edged higher by 2 basis points to 1.31 percent. The yield on the 5 year note also climbed 2 basis points to 2.21 percent. The yield on the 7 year note added 2 basis points and rests at 2.89 percent. The yield on the 10 year note added 2 basis points and stands at 3.35 percent. The 30 year bond bucked the 2 basis point trend and increased a basis point only to yield 4.28 percent.

Prices of Treasury coupon securities staged a powerful rally as the soothing and dulcet tones of Ben Bernanke speaking to a New York gathering of economists was a powerful force inducing investors to buy bonds and to buy bonds with longer maturities.

The speech by the Chairman provided intellectual cover for agnostics and disbelievers on the oft stated premise that the funds rate would remain at extraordinarily low levels for an extended period of time.

The Empire State Survey of manufacturing in the New York region posted a larger than expected decline of about 11 points following outsized gains in the prior month.

I thought the interesting part of this report was the in the supplemental question which the Fed submitted to respondents.

Prices of Treasury coupon securities have posted mixed (and seemingly random) results in overseas trading. I am not sure which particular factors influenced trading but there is more data and information to absorb this morning, today and this week than in any similar period recently.

The yield on the 2 year note has climbed 2 basis points to 0.82 percent. The yield on the 3 year note has remained static at 1.35 percent. The 5 year note is also unmoved at 2.25 percent. The yield on the 7 year note declined a basis point to 2.94 percent. The yield on the 7 year note slipped 2 basis points to 3.40 percent. The relative value winner of the session is the Long Bond which has seen its yield fall 3 basis points to 4.32 percent.

A real snoozer again in the Eurodollar market. People must be taking the early part of this week off due to the lack of data and the holiday Wednesday (the floor is closed). You’re seeing some spreads in the futures curve correct finally. Red pack - Green pack spread is flattening for the first time in days. The March 2011 - March 2012 spread I mentioned a few days back is starting to come back down in price. This is primarily due to someone buying the March 2010 - March 2011 - March 2012 butterfly. They’ve bought about 3,500 so far. If the March 2011-2012 spread gets to around 115 I think it’s a buy, still seems rich here (122.5). The first 8 futures contracts themselves are feeling top heavy here, they are incapable of breaking but they can’t seem to go much higher either. It should be interesting to see how/if the curve moves over the next week or so.

Only trades to note in the option space, hot money bought 7000 midcurve December 9825-9850 put 1×2’s (futures are 9860). Vol is basically unchanged from Monday’s close. The December 2010 9862.5 straddle is 92/93.

Prices of Treasury coupon securities are posting modest gains in overnight trading. In Germany the ZEW survey of investor confidence fell more than expected. Separately, Fitch noted that amongst the large industrial nations the UK is most likely to face the ignominy and and infamy of a credit downgrade.

The yield on the 2 year note has slipped a basis point to 0.84 percent. The yield on the newly minted 3 year note has declined 2 basis points to 1.39 percent. The yield on the 5 year note edged lower by 2 basis points to 2.27 percent. The yield on the 7 year note declined 3 basis points and fell below 3.00 and landed at 2.97 percent. The yield on the 10 year note dropped 3 basis points to 3.46 percent. The yield on the Long Bond declined 2 basis points to 4.38 percent.

Prices of Treasury coupons are finishing the day with just marginal changes and most of the benchmark securities are virtually unchanged. The 3 year note auction produced a superior result but it is languishing in secondary market trading. There has been very little follow through buying and dealers who missed the auction do not feel impelled to chase bonds with the 10 year tomorrow and the 30 year on Thursday.

I did hear of a reasonable amount of customer activity and active trading. Salesmen reported Asian central bank buying of the three year sector as well as the same group buying in the seven year bucket. Another salesman reported central bank selling of off the run 5 year paper. He assumed that money would park itself in the new 3 year note but averred that he had no direct knowledge of that process.

Prices of Treasury coupon securities are posting small (very small) mixed changes in overnight trading. Benchmark securities are either unchanged or a tad lower in price (and with the inverse relationship between price and yield constant, yields are a tad higher, unless somehow Goldman Sachs (GS) can change that mathematical relationship).

The overnight news lacked a real catalyst for violent price change. The only noteworthy item is a healthy jump in German Industrial Production which rose 2.9 percent in September versus 1.8 percent in August. That leaves IP in that country declining at a YOY pace of -12.9 percent September versus -16.5 percent in August.

Prices of Treasury coupon securities are posting mixed changes today and as the day draws to a close the belly of the curve will outperform the wings of the curve. There was some active trading earlier in the session but as the day has worn on customer interest has wanned.

In an earlier post I noted that the yield curve had steepened to near record levels with 2 year/10 year at 270 basis points and 2 year/30 year at 360 basis points. Each of the spreads has retraced some ground and each is 4 basis points to 5 basis points narrower now as I write.

Prices of Treasury coupon securities are registering very small changes in overnight trading and those small changes have reversed some of the curve steepening march of recent days. So in the overnight, longer maturities have gained ground while shorter maturity issues have languished. Market participants are awaiting the monthly labor data and I think the price action indicates position squaring before the data release at 830AM New York time.

The yield on the 2 year note increased 2 basis points to 0.89 percent. The yield on the 3 year note edged higher by a basis point to 1.41 percent. The 5 year note was a bit of an inflection point as it was unchanged and yields 2.34 percent. The yield on the 7 year note declined a basis point to 3.04 percent. The yield on the 10 year note is lower by a basis point at 3.51 percent and the yield on the Long Bond edged lower by a basis point to 4.39 percent.

Prices of Treasury coupon securities have posted modest gains in overnight trading and while the curve remains near all-time steep levels, that action abated overnight. In fact, in the overnight session the 5 year note was the superstar and outperformed its brethren.

The yield on the 2 year note declined 2 basis points to 0.87 percent. The yield on the 3 year note fell 3 basis points to 1.40 percent. The aforementioned 5 year note saw its yield decline 4 basis points to 3.33 percent. The 7 year note also experienced a yield decline of 4 basis points and rests at 3.04 percent as the day begins. The yield on the 10 year note shed 3 basis points and resides at 3.49 percent. The yield on the Long Bond dropped 2 basis points to 4.38 percent.

Prices of Treasury coupon securities are reacting rather violently to the statement by the FOMC at the conclusion of its meeting. The Committee in its infinite wisdom retained the “extended period of time” language, and that has anchored the front end and has motivated a shift in the tectonic plates which undergird the long end of the Treasury market.

For the day, the yield on the 2 year note is unchanged at 0.91 basis points. (For the record it is 257PM as I begin to compose this missive.) The bifurcation word which I employ works again today. The carnage is significantly worse the further out along the yield curve that you are. The yield on the 3 year note has edged higher by 2 basis points to 1.45 percent. The yield on the 5 year note has increased 4 basis points to 2.40 percent. The yield on the 7 year note has soared 7 basis points to 3.11 percent. The yield on the 10 year note surged 8 basis points to 3.55 percent. The yield on the 30 year bond has catapulted 10 basis points to 4.42 percent.

Prices of Treasury coupon securities have posted modest losses in overseas trading. I do not see a strong impetus in the news for the small declines in Treasury prices. Stocks around the globe are trading well with robust gains in Europe and healthy advances in Asia. So I will opine that those gains and futures market indications of solid gains when trading begins in the US are sapping strength from bonds.

Bond traders also confront the uncertainty of the FOMC meeting and the policy statement from that group at about 2:15PM New York time. I believe that the FOMC will acknowledge the continued improvement in the economy but will genuflect to the depth of the recession and its associated headwinds and will reaffirm the need to hold the funds rate at an unusually low level “for an extended period”.

Prices of Treasury coupon securities put in a bifurcated performance today as the short end of the curve barely budged while the long end suffered sharp losses.

The 2 year/10 year spread widened 6 basis points today to 256 basis points.

Prices of Treasury coupon securities are posting robust gains in overnight trading. Risk aversion has risen from the dead as the dollar is rallying to 4 week highs and global equity markets are quaking. Futures market trading indicates that US markets, too, will open with sharp declines.

Feeding the paranoia were large and continuing losses at UBS and news that the UK government has invested heavily in Royal Bank Scotland and Lloyds. Those transactions provide that a significant number of employees at that firm may not receive cash bonuses.