Although there were no significant economic reports on tap today, bond markets still faced a few hurdles–more than 20 billion of them, in fact. That’s how many new dollars of corporate bond issuance hit the market today.
Why is that bad? It’s not necessarily, but corporate bonds do create more bond market “supply” in general. Like anything, higher supply puts pressure on prices to move lower. The only reason that this hefty amount of supply ($20bln+ is a big day) didn’t result in day-over-day losses is that most of the deals aren’t outright surprises to market participants by the time they’re announced.
In other words, traders know there is going to be corporate issuance. They just don’t always know exactly how much there will be and exactly when it will hit the market. The net effect is a bond market that held mostly steady today instead of taking cues from falling oil prices or European bond yields.