MBS Week Ahead: Key Inflation Data and Auctions Ahead of Fed Week

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Posted To: MBS Commentary

Thanks to February's lower day count throwing off the normal cadence of Treasury auctions, bond markets will have to take down 3 auctions in the first 2 days of the week. Today, that includes 3 and 10yr notes, making for a fairly onerous glut of supply–especially in addition to the surge in corporate bond issuance that the big CVS deal seems to have encouraged. Any time we have an overabundance of supply (i.e. new bonds for bond market participants to buy), there's a possibility that recent weakness will prove to have been anticipatory. In other words, did last week break the 3-week trend of modest improvements simply because bond markets were anxious over this week's looming supply? If this is the case, we'll know a lot more about it by tomorrow afternoon (when the last of…(read more)

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