As feared and expected, the combination of Treasury auctions and a long list of corporate issues continued to weigh on bonds today. A flat to slightly stronger start quickly gave way to weakness as investors made way for corporate bonds. A big multi-slice deal from Intel was the worst offender. Traders aren’t eager to catch that falling knife until more of the supply is digested (that would be tomorrow at the earliest). At this point, we will wait at least a few days of recovery before the trend shows its true colors. For today, it was worth a few more basis points on 10-year yields and about an eighth of a point on MBS at 3 p.m. ET.

08:38

Flat to slightly stronger at first, then more sideways and choppy during European hours despite a decent rally in European bonds. Starting at less than a bp lower than 10-year rates at 1.317. UMBS 2.0 coupon up to 1 tick.

10:18 am

The selling pressure intensifies after the 9:30 am of the NYSE opening, but more markedly after 10 am due to a multitude of new corporate bonds entering their “launch” phase. 10 years up 1.4bp to 1.339. UMBS 2.0 loses an eighth to 101-02 (101.06).

13:38

No new weakness in Treasuries since the last update. Additional weakness of the MBS (new recovered). The levels are in line with the last time. No reaction to the 3-year Treasury auction.