Heading into the auction the new FN 4.5 "current coupon" began agressively testing the previously pointed out 99-10 support level.
After the Treasury released the results of the $26bn 7yr note auction "rate sheet influential" MBS coupons showed some signs of improvement...but have since taken a turn for the worse and broken through downside price support. Magnifying the possibility of yet ANOTHER REPRICE FOR THE WORSE is the fact that TSYs are outperforming MBS...
Ugh...here are MBS/TSY yield spreads:
+208/5yr
+87/10y
....and heading wider implying further weakness to come.
MBS Market Alerts
