MBS ALERT: Bonds Move Lower Following Auction

30 year bond auction results...

• $12 BLN 29-YEAR 10-MONTH BONDS AT HIGH YIELD 4.009 PCT, AWARDS 27.53 PCT OF BIDS AT HIGH
• BID-TO-COVER RATIO 2.37, NON-COMP BIDS $18.9 MLN
• PRIMARY DEALERS TAKE $6.83 BLN OF 29-YEAR 10-MONTH BONDS SALE, INDIRECT $4.13 BLN

Initial move following auction has been down for bond prices...

• MBS 4.5's down a few ticks to 101-24
• 10yr down just slightly, bumping yield to 3.195
• 30yr down just slightly bumping yield to 4.01

The high yield at 4.009 with only 27% at high is not bad at all, and we'd be surprised to see a major sell-off develop out of this auction.  Nonetheless, MBS are at their lowest levels of the day which always introduces some risk of reprices for the worse.  We'll be back shortly with official auction results and charts.