Bonds Remain Resilient Despite Supply-Related Headwinds

Abstract

Bonds Remain Resilient Despite Supply-Related Headwinds Supply and Demand 101 tells us that higher supply means lower prices, all other things being equal. Supply is fairly predictable at times, but some sectors wax and wane more than others. The corporate bond market is one such sector and it has seen supply ramp up aggressively in the past 2 weeks. Combine that with the already known but still relevant challenge of taking down this week's Treasury auction supply and it's fair to say there are headwinds for bonds at the moment. Modestly stronger overnight, mostly during European session opening hours. 10yr down 6bps. Modest additional gains-still slow and steady. 10yr in line with previous update, down 6.2bps at 2.764..