MBS Live Recap: 10yr Auction Easily Helps Rates Hold The Range. What Next?

Today's 10yr auction was exceptionally strong.  In fact, by the time we consider the fairly epic levels of corporate bond issuance and the looming ECB announcement, the auction was actually stronger than the already-strong stats suggested.  Actual trading levels did a good job of splitting the difference with yields most of the way back to last week's range.  The best that can be said about all of the above is that the auction helps reinforce the broader range (where 1.37+ is a ceiling level), but that the range will be re-assessed yet again on Thursday morning after the ECB announcement.

Econ Data / Events
Market Movement Recap
09:00 AM

Bonds improved overnight amid a risk-off trade led by Europe.  10yr yields are 3bps lower at 1.35% and MBS are an eighth of a point higher.

01:07 PM

Bonds building on gains after the strong 10yr Treasury auction.  Yields down 3.6bps at 1.343% and MBS are up an eighth.

03:38 PM

Bonds doing a good job of holding gains despite heavy corporate bond issuance (strong 10yr auction makes the gains logical though).  10yr yield down 4.4bps at 1.33% and 2.0 UMBS up just over an eighth of a point. Waiting on bigger things like tomorrow AM's ECB announcement. 

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