Putting another 10 minutes between us and the auction has allowed more of the characteristic volatility to play out.  See below that the 10 yr immediately shot up almost exactly to yesterday's high yield of 3.73 and MBS down to yesterday's low range of 99-12 to 99-14.  Both have since benefited a few ticks from bounces at those levels, but that's no guarantee of direction for the rest of the day.

One convenience about such losses (occur rapidly and move right to a previous low) is that we can expect the first reprice for the worse to be the last IF the resistance levels hold up.  Conversely, if you get a quick reprice for the worse, and then we break resistance for the worse, it raises a distinct possibility of further losses into the afternoon. 

But for now at least, just expect the one reprice until further notice as we are indeed holding above yesterday's worst levels, AND if you can believe this, only 4 ticks down on the day...

For those interested, here's the normal auction results "mark-up"