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Bond Markets Stay Strong After Stellar 10 Treasury Auction
Posted to: Micro News
Wednesday, March 12, 2014 1:08 PM
It's a bit early yet to assume the positivity will remain, but the initial reaction to the 10yr auction is clearly positive for Treasuries and MBS. Compared to a "when-issued" yield (similar to a 'forecast,' but market driven) of 2.744, the actual high yield came in at 2.729.
Demand was robust to say the least, with the strongest ratio of dollars bid to dollars auctioned since December 2012 (2.92 today vs 2.95 back then).
10yr yields had been trading at 2.735 ahead of the auction and are 1bp lower now at 2.725. Fannie 4.0s added 2 ticks, moving up to 104-06 (total gain of a quarter point on the day).
These levels have been holding for several minutes now.
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