Aug. 8 at 9:34 PM
Bond market has to absorb a combined
$103B (
$42B of 3-yr notes today,
$38B of 10-yr notes on Wed, &
$23B of 30-year notes on Fri) auctions before the week is out — up
$7B from the May slate.
JP Morgan: “There are a lot of factors coming together to push long-end rates higher,” - The move could have legs, citing the boost to Treasury auctions, a BoJ policy shift & ECB tightening.
However, the recent surge in yields was paused as investors sought safer assets after data showed China’s trade slumped more than expected & Moody’s downgraded credit ratings for some small & midsize US banks.
The key question is whether long-dated US yields above 4% will prove attractive for buyers & also arrest the recent trend toward a sharply steeper yield curve.
Ahead of each sale, the market is expected to push yields higher to draw in more buyers & leave primary dealers holding less paper to unload after the auction.
$SHY $TLT $UTHY -
$SPY $QQQ