MBS UPDATE: TSY RESULTS

APRIL FN30_____________________________

FN 4.0 -------->>>> +0-06 to 100-09 from 100-03

FN 4.5 -------->>>> +0-07 to 101-29  from 101-22

FN 5.0 -------->>>> +0-07 to 102-31 from 102-24

FN 5.5 -------->>>> +0-07 to 103-21 from 103-14

FN 6.0 -------->>>> +0-03 to 104-10 from 104-07

APRIL GN30____________________________

GN 4.0 -------->>>> +0-06 to 100-14  from 100-08

GN 4.5 -------->>>> +0-05 to 101-31 from 101-26

GN 5.0 -------->>>> +0-05 to 103-14 from 103-09

GN 5.5 -------->>>> +0-06 to 103-29 from 103-23

GN 6.0 -------->>>> +0-05 to 104-14 from 104-09

Bid To Cover Was Much better than the last 7 yr auction on 2/26/09 coming in at 2.52 vs. 2.11.  Indirect bids (aka, foreign participation) was slightly worse and slightly weak, at 28% vs. 38% last time, but not so weak to spark a sell-off.  10% of the bids were at high end of the yields compared to 68% last time.  This is encouraging because it indicated that a much larger component of the bids were willing to accept lower yields. 

MBS under a modicum of pressur now as the 4.0% coupon retests a post auction low of 100-04.  As mentioned in last post, the 100-00 would be much more important, but the 100-04 level could be our first indication of a momentum shift.  PROBABLY no reprices for the worse on this, and potentially even reprices for the better as the 7yr note price continues to push into highs.  This should allay MBS's fears (if they even have any) as long as it continues to be the case.