The bond rout on Friday and today has been a tough one to explain. Oil prices have risen but nothing has materially changed in the fundamental or Fed view.
Earlier, I brought you talk that corporate bond issuance was something people in the bond market were citing as a reason for the uptick in yields. That thinking is getting more attention now as the market dwells on the puzzling move.
US yield are up 8-9 basis points across the Treasury curve today and Reuters is highlighting investment grade issuance. They highlight a potential sale of $100-$150 billion in corporate debt this month.
Looking ahead, the thinking in the bond market is that the rate-lock hedging that led to a bond slump will unwind after the issuance and that will lead to a bid in bonds.
