MBS RECAP: Bonds Rally Despite Weak 30yr Auction

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Posted To: MBS Commentary

In recent weeks, we've increasingly discussed the concept of " supply ." This has largely been driven by the ramp up in corporate debt issuance creating excess supply in fixed income markets, resulting in upward pressure on rates. Then, of course, there's the regular old Treasury supply that we see in the form of auctions every other week. This week played host to the more important of the two cycles: 3yr, 10yr, and 30yr maturities. These aren't necessarily more important because 10's are the most widely traded global interest rate benchmark, but rather because the 3 auctions are heavily weighted toward the longer end of the yield curve. One big issue recently is that the corporate debt issuance has also been skewed toward longer maturities--longer than normal anyway...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/472066.aspx

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