Demand is feeding the pipeline

Empire manufacturing numbers beat expectations showing an improvement in the New York area.
In another good sign initial jobless claims numbers came out lower than expected.
Confirming that the market wants to rally, the S&P stock index closed above the 1,400 threshold.
It was a slow day in the corporate bond markets as a feeling of exhaustion seemed to set in.
The exhaustion was similar to last Friday's, coming one day early though, after another very busy issuance week for bonds.
In Treasury bonds, there was more heavy selling action in the morning.
Most of the sellers of Treasury bonds were Asian accounts.
It's important to note that this time of the year is when a lot of Japanese accounts clean up their books ahead of their fiscal year end.
Demand for corporate debt on the other hand has been extremely strong, particularly for primary new issue bonds.
Demand is feeding the pipeline.
Issuers are happy to issue bonds given how low interest rates are and investors are happy to buy bonds in a hunt for yield.
With the recent Treasury selloff and with yields going back up a little bit, it makes corporate debt that much more attractive.
Most investor demand has been focused on shorter maturity buckets i.e. 3 year or 5 year bonds are preferred to 30 year debt.
This bias in demand has been exacerbated by moves in the Treasury long bond (the long bond sold off a few points over the past couple of days).
As for credit spreads, they have come in a lot (tighter) really fast.
Whether or not spreads remain at these tight levels, investors will likely continue to buy corporate debt as it is attractive to them from an all-in yield perspective.
University of Michigan consumer confidence numbers are out on Friday.
The Council on Foreign Relations also kicks off its 2012 Corporate Conference; it should be very interesting.