MBS Day Ahead: State Of The What? Bonds Turn Attention to Supply and The Fed


Posted To: MBS Commentary

Despite a fair amount of focus on last night's State of The Union speech in the news, it was a complete dud in terms of bond market movement. These speeches are usually duds, but this time around, bonds were on high alert for any threats, having made 2 successive 3yr+ intraday highs. The thinking was that a more robust announcement of the infrastructure spending plan alluded to last week, last month, and last year would put pressure on bond markets because of its implications for Treasury supply. There are several articles covering the infrastructure plan as it related to last night's speech. Here's one . A more important supply consideration arrives this morning in the form of the Treasury's quarterly refunding announcement. Markets expect 3/10/30yr auctions to come in at …(read more)

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