Fixed Income Close

Supply, supply, supply is the focal point next week amid an otherwise light data and Fedspeak calendar. The Treasury could sell over $170 bln in bills, notes, bonds, and TIPS next week, assuming a $35 bln 4-week bill auction (details announced Monday). For the first time ever, the debt managers will conduct 4 coupon/TIPS offerings. Despite the advent of this massive supply, yields are still sharply lower as stocks are down over 2%. Monday's ISM Non-Manufacturing index highlights the data calendar. The rest of the week is virtually empty until Friday when trade, import and export prices, and consumer sentiment will be released. Other factors that will influence trading are the start of earnings season, and the G8 meeting.