The equity slide called the tune last week but this week could hinge on debt supply. The US is in the gap week for Treasuries. Corps and Junk shelf should be watched closely. The EU has several important issues to place. The Italians start things off on Tuesday. Germany has a 2 year on Wednesday amid continued default debate. France shows up on Thursday along with a 15 year Spanish placement.
POMO round 7 stats showed continued interest in offering TIPS. The tone still says players feel real rates are too low. POMO round 8 will wrap up QE2 with 50B in purchases through June and 12 B in Agony rollovers in July. The Fed did hit the 70% limit on 2 issues in the 7 to 10 bucket during POMO 7.