40 billion of 5 year notes hit the auction block with a not so hot response

40 billion of 5 year notes hit the auction block with a not so hot response.  Indirect bidding wasn’t bad at 48% but the issue produced a 3 bps tail.  Give this one a C.  The lack luster auction gave traders a reason to go palms out (turn sellers), taking the 10 year note down 12/32’s in a nano second.  Mortgage backs followed suit, falling 8/32’s in the same time period.  Market jitters are in play as the Fed is 45 minutes away.  Buckle up!

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