MBS ALERT: Ticking down after Treasury Auction

It's unclear at this point whether recent selling in the 4.5 MBS is correlated with the 10 yr treasury auction.  Regardless, we've fallen 6 ticks in less than 5 minutes.  This can spook lenders that price "on the come" or are otherwise trigger happy, aggressive, or ahead of the market to consider repricing for the worse sooner than later.  In this case, the MBS only component of that reprice would account for at least a .25 hit.  If lenders add anything to that for their tradeflow concerns, it could be more.  This is SUCH a recent development and trading is SOOOO thin that this could all turn around shortly, so if your lender is normally behind the curve a bit, sit tight.  If your deal stands on the edge of a knife, pull out those lock sheets and have them ready to fax pending an update from us in about 10 minutes.