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MBS Day Ahead: Bonds Bide Time With Fed Speakers and Auction Anxiety

Posted To: MBS Commentary

Bonds lost ground moderately yesterday and blame was most easily assigned to the broad notion of "supply." More specifically, a record-setting round of Treasury auctions kicks off today with 3yr notes, which are by far the least relevant of the 3. Things don't get super serious until tomorrow's 10yr Note auction. Things can also get serious when a huge corporate bond offering hits the market, as was the case with Amazon's $18 bln deal yesterday. Amazon was joined by nine other issuers for a total of nearly $29 bln on the day, which was $3bln higher than the entire previous week, and roughly double the volume seen in the week before that. Corporates are off to another strong start today (i.e. upward pressure on yields) even though no massive Amazon-like deals are expected…(read more)

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