5 year notes crossed the auction block to yield 1.33% with 39.5% taken by Indirect bidders. The “street” took a mere 11% as the auction posted a 2.82% to 1 bid to cover. Post auction, price action on treasuries and mortgage backs has been soft with current coupon MBS now off 10/32’s.
Technically, market profile structure is bearish following Monday/ Tuesday price action. Sellers are in control of the market with additional downside (higher yield/worsening Austin mortgage pricing ) a high probability.
Best bet for Austin mortgage borrowers is to be defensive in this market!