Weekend Reading: Treasury Tribulations

Good Sunday morning, and welcome to another edition of Weekend Reading. First a look back at the week that just finished, then a look forward to the week ahead, and, finally, a summary of articles and papers worth reading.

While markets are no longer winging higher the way they were back in March and April, they still turned in a solid week last week. (See chart below.) The main causes were better economic numbers, continuing skepticism from a huge group of bears and more signs that the worst is over and that we're now in merely a recession instead of something worse. Fears persist that problems are emerging in Treasury markets, with yields widening, but so far they have not cracked the back of recent equity market gains.

Turning to economic indicators, investors will be watching this week's three-year Treasury note auction, plus a 10-year note auction. We will also see May retail sales, plus a June reading of the Michigan consumer sentiment index. ...