In line with our call,the NOB yield curve spread rallied 5 bps ($195/spread) to 126 bps yesterday due to the combination of Fed Chairman Ben Bernanke’s comments and the results of the 30 yr U.S. Treasury auction.
Significantly, this close is 1 bp above the 50 day and 200 day moving average. Expect a test of the 128 bps level (38.2% Fibonacci). Did you leave money on the table yesterday???