Details of the 21 billion 10 year note auction just hit the tape – this was a very good auction

Details of the 21 billion 10 year note auction just hit the tape.  Yield posted at 3.90%, Indirect Bids at 43%, bid to cover 3.72% (average 2.93%), and best of all, the issue traded 3.3 bps through the screen at the bell.  This was a very good auction.  We’ll give it an A-.  Not quite sure what is going on here given the strong demand as the market was looking for this to be a woofer.  Nonetheless, Austin mortgage pricing will improve as mortgage backs and treasuries improve.  Yield on the 10 year now trades at 3.90%, an important level which we will watch into the close.

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