Bond markets were having a decent enough day during the morning hours.  Stocks and European markets were weaker, dragging bond yields lower in a classic "risk-off" trade.  Later in the day, bonds marched to the beat of their own drummer as the 10yr auction came in much weaker than expected.

In many ways, today's 10yr auction was an acid test for broader bond market demand.  Auctions that occur during clearly-defined trends tend to offer more insight about underlying trading mentality.  We've been in a clear uptrend in yields since mid-April and today's auction was in a position to call that uptrend into question.  

Instead, the auction basically endorsed the uptrend.  The stats were weaker across the board and today's trading levels responded accordingly.  After fighting to hold onto modest gains just ahead of the auction, bonds easily slipped into negative territory afterward, closing at the highest yields in more than a month.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.5
102-05 : -0-03
Treasuries
10 YR
2.4105 : +0.0035
Pricing as of 5/10/17 6:45PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:17PM  :  What Did The Auction's 5 Fingers Say to Bond Markets' Face?
1:02PM  :  ALERT ISSUED: First Move After Auction is Negative; Reprice Risk Increasing
12:58PM  :  10yr Auction Preview
11:30AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
9:06AM  :  Bonds Reverse Course, Turn Stronger After Initial Data Reaction

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "D"
Matthew Graham  :  "RTRS - PRIMARY DEALER ACCEPTED BIDS 22.53 PCT OF AMOUNT TENDERED IN U.S. 10-YEAR NOTES SALE, DIRECTS TAKE 39.49 PCT OF BID AMOUNT, INDIRECTS 88.47 PCT"
Matthew Graham  :  "RTRS - PRIMARY DEALERS TAKE 34.22 PCT OF U.S. 10-YEAR NOTES SALE, DIRECT 5.06 PCT AND INDIRECT 60.72 PCT"
Matthew Graham  :  "RTRS - U.S. 10-YEAR NOTES BID-TO-COVER RATIO 2.33, NON-COMP BIDS $27.17 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $23 BLN 10-YEAR NOTES AT HIGH YIELD 2.400 PCT, AWARDS 13.56 PCT OF BIDS AT HIGH"
Matthew Graham  :  "
New MBS Huddle Released
Thoughts on Today's Weakness, Broader Trends, and Lock Strategy"
Matt Hodges  :  "your voice was smooth, but your message was cautionary."
Matthew Graham  :  "
MBS Live Update Issued
What Did The Auction's 5 Fingers Say to Bond Markets' Face?"