Baird Advisors Fixed Income Market Commentary - July 2009

Treasury yields were volatile again in July (10-yr. yield ranged from a low of 3.30% on July 10 to a high of 3.72% on July 27) but as in June, finished the month nearly unchanged from where they started (e.g. 2-yr. unchanged at 1.11%, 10-yr. 3.48% vs. 3.53% on June 30). Mixed economic signals were behind the intra-month volatility, but the ongoing tug-of-war between heavy Treasury issuance ($100+ billion per month) and surprisingly strong demand (encouraged by Government purchases) was also a factor.

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