Posted To: MBS Commentary

At the end of last week, we noted the looming Treasury auction cycle at the start of this week. Due to calendar constraints, it's earlier than normal and more condensed (2 auctions Monday and one on Tuesday as opposed to the typical T-W-Th format). The pattern of extra weakness in bonds on the 2-3 business days leading up to the auction cycle has been more reliable than normal in the past few months. This time around, however, the weakness is breaking multi-month technical ceilings as opposed to staying range-bound. Could the auction-cycle pattern repeat itself? In other words, will we see some refreshing resilience after Monday's 5yr auction and decent gains after Tuesday's 7yr conclusion? The answer to that question doesn't much matter at the moment. Bonds have shifted away…(read more)

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Source: Mortgage News Daily