Bond markets had an uneventful overnight session until just before the start of domestic trading hours. Most market participants were willing to chalk up some early strength to a botched suicide bombing in Times Square (the bomber was the only one seriously injured). While the bombing attempt was certainly visible in early trading, it didn’t really change the trajectory for longer-term bond yields heading into the 1pm Treasury auction.
The auction itself was pretty bad (not appalling though). On today’s light volume trading session, it proved to be the most profound inspiration for bonds.
If we look at a 1 or 2 day chart, the auction’s impact is definitely noticeable. Look at the bigger picture, however, and it quickly gets lost in the range-bound shuffle. We continue to wait for Wednesday’s inflation data and Fed forecasts for this week’s biggest market movement potential.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
102-22 : -0-05
2.3903 : +0.0073
|Pricing as of 12/11/17 5:32PMEST|
Today’s Reprice Alerts and Updates
1:04PM : ALERT ISSUED: Negative Reprice Risk Increasing After Bad 10yr Auction
9:36AM : ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders
MBS Live Chat Highlights
Matthew Graham : “RTRS – PRIMARY DEALERS TAKE 34.44 PCT OF U.S. 9-YEAR 11-MONTH NOTES SALE, DIRECT 8.37 PCT AND INDIRECT 57.2 PCT”
Matthew Graham : “RTRS – U.S. 9-YR 11-MO NOTES BID-TO-COVER RATIO 2.37, NON-COMP BIDS $9.35 MLN”
Matthew Graham : “RTRS – U.S. SELLS $20 BLN 9-YR 11-MO NOTES AT HIGH YIELD 2.384 PCT, AWARDS 91.12 PCT OF BIDS AT HIGH”
Matthew Graham : “Auction preview: bid to cover has been around 2.4-2.5 for this time of auction. The current yield expectation is 2.38. Indirects have run about 64%. For more info on these terms, check this link: Treasury Auction Jargon, Definition, and Significance “