On the Treasury front, this week’s paydowns were only $13 billion, but next week the Treasury will swing to a huge negative influence as it dumps mass quantities of new supplies of 3, 5 and 7 year notes on the market. Depending on the size of the 4 week bill auction and whether or not they roll over an expiring CMB, the amount of new supply could be anywhere from $17 billion to $86 billion and it should only get worse for the next 6 weeks.
The Fed bought $7 billion in Treasuries today. It has two buys scheduled for next week. The Fed releases its H41 balance sheet data after the market close today. A complete update of the data and analysis will be posted here in Friday’s report. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.