MBS RECAP: Supply and Headlines Weigh on Bonds

Posted To: MBS Commentary

Much like the week before last, we're seeing an abundance of new "supply" hitting the bond market. This comes both in the form of the scheduled Treasury auctions as well as the more fluid world of corporate bond issuance. Traders generally have a good idea of which firms will be issuing debt, but the exact dates, times, and amounts are often up in the air. In any event, they're nowhere near as rigid and specific as the Treasury auction calendar. For fixed-income markets, all supply has an impact. Granted, certain types of supply will affect part of the bond market more than another, but any time the supply of anything is increasing, there will be general downward pressure on prices --all other things being equal. Lower prices = higher rates when it comes to bonds. Today's...(read more)

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