We knew bonds were going to be ugly at Treasury auctions this week, but the rebuff started early with a flood of corporate bond offers. Amazon led the way, making up nearly $ 20 billion of the fairly epic $ 34 billion that day. These are numbers we only ever see when a big player brings one of the biggest bond offers of the year to the table. What is your $ 34 billion investment grade debt if you hit it all in one day? The best way to answer this is to simply remember that the Fed is only adding $ 40 billion in new MBS in a full month. All in all, the damage was minimal, as MBS only lost an eighth of a point from 4 p.m. ET and increased 10-year returns by 2 basis points to 1.60%.

Market Movement Review

8:42 am

a little weaker out of the gate in Asia, but since then back on its feet. Treasuries now only slightly stronger and MBS by 3 ticks (0.09) at 104-04 (104.125).

12:23 p.m.

Nothing special so far. Several speakers fed but none of their comments had strayed from the recently trodden path. 10-year returns and MBS are both unchanged from the last update

12:47 pm

Faster pop towards weaker levels shortly after the last update. 2 potential scapegoats: several new corporate bonds hit the market and it’s the end of the EU trading session. 10-year yields are now up 1.2 basis points to 1.591%, and the MBS are unchanged (about an eighth point off highs).

3:50 pm

Additional weakness during the afternoon with the best explanation being “output” (see today’s huddle / video for more). 10 years up, about 2.5 basis points and MBS down, about an eighth of a point.