MBS MID-DAY: Back to Positive Territory After Decent 10yr Auction

By: Matthew Graham

Today's 10yr auction was pretty good, although it required a bit of weakness leading up to it in order to generate the relatively strong result.  The overall level of demand was right in line with recent averages, and at yields that were just a bit lower than what traders were prepared for.  But again, that "preparation" was evident in the Treasury-specific weakness this morning.  This is especially noticeable from 11am as MBS held sideways while 10yr yields rose 2bps.  They've gained back about 1.5 of those so far--nearly unchanged day-over-day.

Same as it ever was, the most profound outperformance has been in European bond markets.  German Bunds haven't even been gaining as much as other countries, but they have a more direct correlation with US Treasuries traditionally, and even they have been handily outperforming.  Bunds and Treasuries were both mixed overnight with the former pushing down to more new all-time lows by the morning hours of the domestic session.  Treasuries were obviously reluctant to follow with the auction on tap, but nonetheless were dragged back to unchanged levels by 11am. 


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
101-04 : +0-02
FNMA 3.5
104-07 : +0-02
FNMA 4.0
106-14 : +0-00
Treasuries
2 YR
0.6920 : +0.0120
10 YR
2.1170 : -0.0040
30 YR
2.6920 : -0.0160
Pricing as of 3/11/15 1:20PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:59PM  :  10yr Auction Preview
10:10AM  :  Pulling Back From Overnight Weakness; MBS Erase Losses

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
C M  :  "I'd be willing to bet it goes in the portfolio. Use to work for a bank that offered employees an ARM at 1 year CMT + 100bps. The margin shot up to 200 bps if you left the company. People wouldn't even consider leaving if they had a loan there. "
John Tassios  :  "Astoria always prices NY loans very cheap rate wise. I used them in the past, and their NY loans on their rate sheets were much lower than rest of the states. "
dshpuntov  :  "Does anyone do business with Astoria Bank? Losing a $500k 15 year fixed (2 fam NY 70% LTV 800 FICO), an employee is saying that they are offering them 2.125% on a 15 Year Fixed - 0 points"