The refunding announcement was supposed to show a dip from the prior estimates. Instead the refunding needs increased by 20%. Yikes.
Bond yields have moved off low levels on the day, but still are negative on the day with the:
- 2-year yield at 4.970%, -2.3 basis points
- 5-year yield at 4.649%, -4.2 basis points
- 10-year yield 4.65%, -4.3 basis points
- 30-year yield 4.749%, -3.2 basis points
the bigger reaction is in the stock market where the broader S&P and NASDAQ indices are now negative on a day. The Dow Industrial Average averages unchanged:
- S&P index -6.37 points or -0.12% at 5093.81
- NASDAQ index -25.23 points or -0.17% at 15900.13
The USD is a little higher but still well off the highs for the day.
Honestly, I would've thought that the reaction would be a little bit more pronounced. A 20% increase is not something to dismiss. However, in the 1Q the total borrowing was $748B. The borrowing is less in this quarter as it included April 15 or tax day where there are surpluses. Maybe it is bad, but it could be worse and overall borrowing is still much less than 1Q. .
Of course the Federal Reserve will announce their rate decision on Wednesday. The US jobs report will released on Friday. Both will be a big influence for rates, the dollar and stock prices as well.
