Rates Track New Highs in Equities

Tsys finished stronger, climbing back to near midmorning highs by the bell, tracking new all-time highs in equities (ESU1 4534.0). Rates see-sawed off mildly mixed levels after July pending home sales came out weaker than expected -1.8% vs. +0.3% est.

• While disappointing, JP Morgan economists said the decline was still better than their own estimate of -3.0%. JPM notes "sales data have been a bit noisy in recent months, with an 8.3% jump in May being partially reversed by declines in the two months of data reported since then."
• Support evaporates following 30Y Block sale: -7,753 USZ 163-11, sell through 163-13 post-time bid at 1016:41ET, 163-07 last. Tsy regained footing, see-sawing higher with 30Y bonds extending highs after the closing bell.
• Large Eurodollar flow: +25,000 EDZ1 99.82 (+0.005); Large Green Sep/Dec spd buy: +50,000 EDU3/EDZ3 at 0.115 and bid for another 40,000.
• Focus on Friday's Aug employ report, +750k est vs. +943k prior.
• The 2-Yr yield is down 1.2bps at 0.2033%, 5-Yr is down 2.9bps at 0.7707%, 10-Yr is down 2.4bps at 1.2835%, and 30-Yr is down 1.8bps at 1.8984%.