There are some receiving demand on the back of the supply. |
These are ugly numbers for bonds. I have been calling for 10-year yields to move back above 4.6 percent. |
This is big news. People sort-of thought it was inevitable, but it's still come sooner than many expected. |
Today is about positions unwinding and we should not confuse price action with new, fundamental, information. When unwinds of magnitude take place, they have an endgame -- those positions will square and/or strong hands will dominate. |
We are getting hit with an enormous amount of supply. That is having an exaggerated influence. |
We cannot take solace from these figures as the upward revision to the core PCE deflator takes the year-on-year rate to 1.9 percent, up against the Fed's outer boundary. |
We deem this action representative of a market that has lost the flurry of last week's panic buying and instead is rethinking its view as to the near-term motivation of the Fed and the impact of Katrina. |
We're anxious fence-sitters. Yields are back to where we like them -- and we'll like them more if we see more buyers and improved price action. |
We've seen dip buying and think that's a precursor to larger commitment into supply. |
While the curve has moved to flat as a pancake to a bit inverted and yields open the year near 4.38%, we are not excited about further inversion just yet. |
Without more critical information, people are not going to be willing to push it. I don't think the market has been short enough or bullish enough to push this rally further. |
Without the benefit of data or issuance, the impetus to extend those gains is limited. |