Treasury Auction Relief Rally and Month-End Support
3 Hours, 41 Min ago
With Thursday being a half day before a 3.5 day weekend, it’s entirely reasonable to suspect month-end trading helped the bond market today. There’s never a great way to know if it will help or hurt, but it’s a common hindsight conclusion when markets are moving without any other salient provocation. Speaking of provocation, the 7yr Treasury auction provoked a bit more buying in the afternoon. It also helped underscore the Treasury outperformance of MBS after 2 previous days of underperformance (i.e. the market was making room for the auctions and it found that it had plenty). Thursday is the busiest day of econ data of the week. None of the data is top tier, but it could be enough to shake things up in the AM hours.
10:26 AM
Modestly stronger overnight. MBS up 2 ticks (0.06) and 10yr down 1.6bps at 4.222.
11:36 AM
Additional gains heading into the 11am hour. MBS up 3 ticks (.09) and 10yr down 3.2bps at 4.206
01:03 PM
7yr auction was slightly stronger than expected. Bonds rallying a bit more. MBS up 5 ticks (.16). 10yr down 5.2bps at 4.186
03:24 PM
MBS still up 5 ticks (.16). 10yr down 4.4bps at 4.194
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