Baird Advisors Fixed Income Market Commentary for March 2010

Treasury Yields Up in March, Down for the Quarter

April 5, 2010

Treasury yields rose by as much as 25 bps in March as investor demand had trouble keeping up with heavy supply. Disappointing results for the Treasury’s 2, 5 and 7-year auctions (total new supply of $118 billion) triggered the sell-off in the 3rd week of March. Anticipation of the March 31 termination date for the Fed’s secondary market purchases of Government Agencies and Agency mortgage pass-throughs also contributed to the market’s decline.

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