MBS LUNCH: Rates Rally After Long Bond Auction

By: Matthew Graham •

From Reuters:

 

  • $13 BLN 29-YEAR 10-MONTH BONDS AT HIGH YIELD 4.640 PCT, AWARDS 27.21 PCT OF BIDS AT HIGH
  • 29-YEAR 10-MONTH BOND BID-TO-COVER RATIO 2.68, NON-COMP BIDS $17.5 MLN
  • PRIMARY DEALERS TAKE $7.06 BLN OF 29-YEAR 10-MONTH BONDS SALE, INDIRECT $5.29 BLN
  • high yield 4.640 pct (absolutely huge "stop through")

 

29-YEAR 10-MONTH BONDS

YIELDS

    High        4.640 pct
    Median      4.607 pct
    Low         4.500 pct

PRICE/ACCEPTANCES

    Price              95.731167
    Accepted at high   27.21 pct
    Bid-to-cover ratio 2.68

AMOUNTS TENDERED AND ACCEPTED (dollars)

    Total accepted                       13,000,034,100
    Total public bids tendered       34,893,909,900
    Competitive bids accepted      12,982,574,200
    Noncompetitive bids accepted  17,459,900
    Fed add-ons                          504,755,100

    Primary Dealer Tendered        23,876,300,000
    Primary Dealer Accepted         7,058,196,500 (54% of auction , just under 30% hit rate)

    Direct Bidder Tendered           2,404,100,000
    Direct Bidder Accepted            636,337,600

    Indirect Bidder Tendered        8,596,050,000
    Indirect Bidder Accepted         5,288,040,100 (40%)

BOND DETAILS
    Issued date    Jan. 15, 2010
    Maturity date  Nov. 15, 2039
    CUSIP number   912810QD3

 

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Folks....  It's a good'n...

DROP, STOP, AND ROLL?

The last auction shoe has dropped.  The auction stopped through impressively, and the recent roll in MBS is but a faded memory destined to be crushed by day's end (in the sense that everything given up during settlement will be more than recaptured here only a few days after settlement).  For now, I'm gonna go out on a limb and say float.  We'll let you know if the market sells off 10 ticks or so and MERELY GETS BACK TO PRE-AUCTION TRADING LEVELS!

(it was a good auction...)