Challenger reported a -25% decline in March corporate layoff announcements from a year ago to leave the lowest count since April 2005.  The new count of hiring announcements almost doubled from February to show a 32% rise from a year ago.  The measures provide a loose read on labor market conditions as the March employment report is released Friday.

Domestic light vehicle sales fell -1.3% to 13.0 mln in March.  Including imports, total light vehicles sales were flat at 16.5 mln.  The discounts and incentives which have been driving vehicle sales are being slimmed down by troubled U.S. manufacturers as sales over the last 6 months have averaged just under 13 mln.  Autos were just 40.5% of domestic sales and summed to 5.3 mln -- down -2.5% from Feb.  Light trucks fell half a percent to an unchanged 7.8 mln.  Imports amounted for 21% of total light vehicle sales and compare to a 20% 2005 average.  The March decline will provide a slight downward effect on March retail sales. 

Treasuries Flip Higher: The market is slightly higher as the day ahead offers mostly Fed-speak & technical trading with data absent. The 10-yr yield is lower at 4.849% after having been sideswiped by comments out of China overnight about diversifying foreign holdings. The 30-yr yield is lower at 4.885% while 2-yrs are pinned to unchanged as the 2-10-yr yield spread slipped back near inverted territory at 0.6. Bond prices in the EuroZone were hit by reports of stronger than expected producer prices, while in Japan bond prices are near flat. Treasuries will likely stick to consolidation & curve trade today though with a bunch of Fed-speak on tap the chances for price swings are lurking. Data are absent as most traders will be eyeing Fri's payrolls as the next item of interest for guidance. EuroZone PPI came in inline while the region's unemployment rate saw the lowest level since mid-2002.  The euro currency got a boost & is making its way beck to the recent highs, now 1.2 eyeing 1.2208 as the ECB policy meeting hits Thurs.  The yen is off on talk that Japanese will look to other countries for yields.  Spot gold is doing a bit better, at 588.35 (+0.50) while crude is slipping, with the front contract at 65.98 (-0.76).  The march of the Federal Reserve speakers has begun with from Frankfurt with Chicago's Moskow  then Dallas' Fisher at noon, Richmond's Lacker at 12:45 & KC's pres Hoenig tonight.  The economic calendar is empty with the rest of the week's marquee numbers sitting in the back of the week.

Treasuries Trade Lower in Light Action:  The market fell early, grabbed a bit of a bounce & then stalled out. The longer maturities got a better bounce as the market resumed flattener trades. The day lapsed into a catatonic state after the initial moves, with put sellers coming in in force while a brilliant dealer is calling for a "temporary bottom" on the 10-yr prices.  The run at a 10-yr yield of 4.900% did not last & previous visits have been brief & generally a head-fake. "The 2-10-yr yield spread is running at 2.4, a bit steeper from the tightest levels seen mid-session.  There are no economic data to report tomorrow. The buck held onto losses through the day with yen hitting 117.6950 & the euro climbing to 1.2146 as the high end of its range around 1.2200 looks to be tested again. Spot gold jumped another +4.20 (587.85) though pulled back from highs of 591.92 while crude oil squeaked higher to 66.74 (+0.11), also off its highs of the day 67.90. Tomorrow has a slew of Fed-speakers starting early from Frankfurt with Chicago's pres Moskow followed by St. Louis' pres Fisher at noon, Richmond's pres Lacker at 12:45 & KC's pres Hoenig later in the evening.