Posted To: MBS Commentary
Heading into the 1pm bond auction, TSY yields in the long end of the curve continue to rise. The 10yr TSY note is -0-14 at 99-02 yielding 3.485%. The long bond is -0-19 at 98-23 yielding 4.453%. "Rate sheet influential" MBS prices continue to bounce around intraday lows. The FN 4.0 is -0-12 at 98-24 yielding 4.131% and the FN 4.5 is -0-09 at 101-19 yielding 4.305%. The secondary market current coupon is 4.209%. The current coupon yield is 72 basis points over the 10yr TSY yield and 60bps over the 10yr swap rate. The Treasury will announce the auction results of the $13 billion long bond reopening at 1pm. Yesterday's weak 10yr auction implies one of two things about the current sentiment of bond investors…either the market already had it's fill of 10s and found this week's…(read more)