We’ll give the 10 year note auction a B, not to hot, not to cold, but just right considering yesterday’s disaster

21 billion of 10 year notes hit the tape with a .5 bps tail.  41.5% of the reopened issue went to Indirect bidders while Direct bidders took 11%.  The “street” took the remaining position of approximately 47.5%.  Bid to cover was a respectable 2.99 to 1.  We’ll give the auction a B, not to hot, not to cold, but just right considering yesterday’s disaster and the tough hedging environment that fixed income investors are in today.

Reaction, post auction has seen the 10 year note slip a few ticks, now off 18/32’s.  Mortgage backs are off 4/32’s, 1/32nd worse than the pre-auction release.  Not much has changed with our bias which remains tactically neutral/bearish short term.  With another 13 billion of 30 year paper on the block tomorrow, choppy trading and volatile conditions will persist.

About Max Leaman Austin Mortgage

GREAT RATES, LOW FEES, CLOSE ON TIME™ ---- 2012 Ranked #1 Austin Residential Mortgage Lender (Austin Business Journal) 2010, 2011 & 2012 Five Star Professional (Texas Monthly) 2009, 2010, 2011, 2012, 2013 PrimeLending Chairman's Circle Award 2009, 2010, 2011, 2012 Scotsman Guide Top Originator (Top 200 Mortgage Professionals in U.S.A.) Better Business Bureau "A+ Rating" National Lender Rankings (Scotsman Guide): Top Purchase Volume (No. 10) Most Loans Closed (No. 32) Top Dollar Volume (No. 88)

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