$150B Bond Supply Set to Reverse Treasury Rally

The Treasury rally is expected to slow down as over $150 billion in US coupon and investment-grade supply is set to hit the market in the upcoming week, causing bond yields to retrace their earlier declines.
Yields on 10-year bonds have only decreased by approximately 9 basis points after dropping as much as 13 bps following the April non-farm payrolls report, which revealed a modest job gain and an increase in the unemployment rate.
Syndicate desks anticipate around $30 billion in investment-grade corporate supply, prompting corporate treasurers to act swiftly to capitalize on declining borrowing costs. Additionally, the US government plans to auction $125 billion in 3-year, 10-year, and 30-year bonds from Tuesday to Thursday, leading to rate-lock sales and investor sales to accommodate the new supply.