The Treasury market saw renewed selling, with factory data providing little comfort on the inflation front and a handful of companies offering bonds ahead of the Federal Reserve decision.
As Wall Street prepares for the Fed's tenth consecutive rate hike since March of last year, several borrowers are piling in after exiting earnings blackouts, with US investment-grade issuance exceeding $22 billion in one of 2023's busiest sessions. Meta Platforms is looking to raise $8.5 billion in bonds, Hershey has priced $750 million in bonds, and Comcast has launched a $5 billion deal.
These big offerings usually represent a double-whammy for Treasuries, which tend to cheapen amid competition from new debt and as underwriters sell government notes to rate-lock the issue for corporate buyers. Another factor weighing on bond prices Monday was the stabilization in sentiment after JPMorgan decided to acquire failed lender First Republic Bank.
Swap traders slightly upgraded the odds that the Fed will increase its policy rate by a quarter-point Wednesday. Treasuries sold off across the curve, with yields on 30-year bonds climbing the most since September and those on 10-year notes approaching 3.6%. Equities were little changed after notching two straight months of gains as traders waded through a batch of corporate results.