There is little news moving the bond market today, as no major governmental reports are due out, and the ongoing news of Greece seeming to predominate. Expectations are growing (today) that the EU assistance will be forthcoming — perhaps in the 4%-4.5% range. This will work to suppress bond prices (raise interest rates) as it’s lower than some investors had expected. But the market seems to be shrugging this off, having not had prices significantly moved by yesterday’s 131,000 drop in claims, and the significant absorption of $82 billion of sales this week.

Although the news all should tend to suppress prices (raise interest rates), much of the factor controlling the market seems to be “technical short covering” — that trading which is forced to buy back previous sales positions. So, a significant amount of purchase in the market is coming from squaring off previous positions.

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