Strong Auction Helps, But Not Enough to Get Rates Back Into The Recent Range

Without much economic data this week, the focus has been on Fed speakers and the Treasury auction cycle (in addition to other bond market supply via corporate bonds).  There was a boatload of Fed speakers on tap today although the first one (NY Fed Pres Williams) was probably the headliner.  Bonds seemed to pay at least some negative attention to his blunt reminders on the long road ahead for tight Fed policy.  Still he didn't define the trading day.  Nothing really deserves that distinction, but if forced to pick, the strong 10yr auction caused the biggest reaction. Friendly though it was, it wasn't enough for yields to move convincingly back into the 3.42-3.62 range.

Econ Data / Events
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Market Movement Recap
09:00 AM

Slightly stronger overnight and very flat.  10yr down 2bps at 3.658 and MBS up 3 ticks (.09). 

10:18 AM

moving into negative territory on Fed comments.  More details in the alert HERE.  MBS down 2 ticks (0.06) on the day but only about an eighth from the highs.  10yr yields are up .7bps at 3.687

01:07 PM

Bonds were already finding their footing, but are making additional gains after an exceptionally strong 10yr auction.  10s down 4.5bps at 3.634 and MBS up an eighth (and rising).

03:50 PM

After giving up some of the post-auction gains, yields are once again near their best levels of the day with 10s down 4.7bps at 3.632.  MBS are underperforming, up only an eighth of a point.

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