With corporate issuance subsiding somewhat and month-end tradeflows providing steadier demand, the last week of May proved to be an eye of the storm.  As we discussed last Friday and again this morning, the new month reinvigorates the risks as far as corporate issuance is concerned.  Indeed, most recent Mondays have spoken to the market's general level of anxiety when it comes to accommodating another glut of new debt supply each week.  Today is already off to a fast start, and the rest of the week is expected to remain busy.  The anxiety therefrom is evident in today's bond market losses.

Keep the following in mind at all times during June.  Any dip in rates that challenges the lower recent range will be seized as an opportunity for corporate debt issuers to roll out new deals.  This will make it very difficult to make meaningful progress below, say, 2.10 in 10yr yields.  It's not impossible, but it would take help from this week's big ticket economic data. 

We had our first dose of big data today and ISM Manufacturing only served to accelerate the selling pressure.  Corporate issuance notwithstanding, stronger economic data helps advance the case for a timely Fed rate hike.  In general, if data is strong or improving, it makes September a more likely rate hike month.  The more this week's data surprises to the upside, the rougher things could become for fans of low rates.