Results of the auction were pretty good

Meant to post this yesterday

Results of the auction were pretty good with 25 billion priced at 3.47% (no tail), 2.81 bid to cover (2.61 average), and 47.5% going to indirect bidders.  Give it a grade of B.  Trouble is, the market is feeling a bit of indigestion.  The 10 year note was up 6/32’s prior to the auction but is now down 2/32’s.  Mortgage backs have cut their gains in half, bringing a worsening price change close to reality.  With the bond market closed tomorrow, expecting further gains (rally) is fool’s gold.  Be careful out there.

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