MBS UPDATE: Auction Results Out And Favorable

By: Matthew Graham

Granted, the 30yr bond is one of the least important tsy's we could examine, the auction was quite good with the high yield falling in line with pre-auction levels.  That's uncommon.

Bid to cover was 2.68.  Indirect was also 49%

 

 

This being the long bond, it's a huge vote for duration.  As lower MBS rates have the longest durations, this should make for an acceleration in our already aggressive affinity for "down in coupon" movement.