MBS RECAP: Bond Markets Rally Before and After 10yr Auction

By: Matthew Graham •

Today was a good day for both MBS and Treasuries.  Not only that, but it was good right from the start (courtesy of a positive overnight session) and never got bad.  It's not too common to see 10yr Treasuries rally for 2 straight days into an auction with no meaningful pull-back.  The fact that this happened today, AND that the auction was still impressively strong is a generally positive statement about the current range.

All that said, there hasn't been much for bond markets to sink their teeth into this week apart from following other markets and trading headlines.  That changes tomorrow with the arrival of the week's first real economic data in the form of Retail Sales and jobless Claims.  With 10yr yields very near their recent middle ground, a big beat or miss in the data could kick off the next move away from that middle ground.  If the reaction is limited, it would suggest focus shifting to next week's FOMC Announcement.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
96-17 : +0-11
FNMA 3.5
100-24 : +0-10
FNMA 4.0
104-06 : +0-09
Treasuries
2 YR
0.3659 : -0.0081
10 YR
2.7246 : -0.0414
30 YR
3.6672 : -0.0408
Pricing as of 3/12/14 4:25PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:32PM  :  Positive Reprice Potential Increasing as MBS Add to Gains
1:11PM  :  Bond Markets Stay Strong After Stellar 10 Treasury Auction
9:16AM  :  Bond Markets Stronger Overnight, Holding Ground into Domestic Session
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "Auction coming right up. Recent average bid-to-cover of 2.6-2.7 for reopenings and yield expectation currently at 2.744"
Matthew Graham  :  "If none of that makes sense, here's some background if you're interested: http://mndne.ws/1gIJmzh"
Matthew Graham  :  "RTRS - U.S. SELLS $21 BLN 9-YR 11-MO NOTES AT HIGH YIELD 2.729 PCT, AWARDS 36.89 PCT OF BIDS AT HIGH"
Matthew Graham  :  "RTRS - U.S. 9-YR 11-MO NOTES BID-TO-COVER RATIO 2.92, NON-COMP BIDS $35.90 MLN"
Matthew Graham  :  "A+"
Jason Anker  :  "2.72 yet again"
Andrew Haynes  :  "feels like we been at 2.72 for ever and a day, but hey, im not complaining not much volitility is a good thing for me!"
Jeff Anderson  :  "I can't believe were still between 2.70 and 2.75. Oh, wait. Yes, I can. Right in the sweet spot. Check back in for April NFP?"
Caroline Roy  :  "wow. pricing is worse today? is that the case for anyone else?"
Victor Burek  :  "I'm seeing better pricing"
Tom Schwab  :  "better pricing here too"
Victor Burek  :  "and we are long overdue for a reprice better"
Matthew Graham  :  "just now hitting +4 ticks from 9:30am"
Matt Hodges  :  "doubt we'll see RP unles we hit and sustain +13"
Matthew Graham  :  "could see some even here, but probably waiting a bit to make sure gains hold"
Sung Kim  :  "get a written voe stewart, written voes dont show his "taxing status" for previous years"
Stewart Anderson  :  "That's what I was thinking but just wanted to check every angle. Thanks for the help MND!"