Eyes remain on the bond market this week as strengthening demand for safety runs into rising supply. The ability of the market to digest rates at the lowest levels of the year will be tested again this week with elections coming up over the next three days:
- Tuesday – $58 billion of 3s
- Wednesday $39 billion of 10s
- Thursday $22 billion of 30s
The 3s sale tomorrow is up against a bare economic calendar while the 10s on Wednesday follow the August CPI report. It also comes after Tuesday’s Presidential debate, which should remind everyone that deficits will stay high no matter who Americans pick.
I’ve been very bullish on bonds recently and yields have moved down as much as any of the bulls could have hoped for. This is a real test though with 10s currently trading about 25 bps below last month’s sale at 3.960%.
US 10s daily