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Just a quick update as we are minutes away from the results of today’s 40 billion 10 year note auction

Just a quick update as we are minutes away from the results of today’s 40 billion 10 year note auction. The market has slipped a touch, primarily due to hedging in front of the issue. 10 year note down 8/32’s (yield 3.75%), MBS off 5/32’s, and stocks up 33 points on the Dow. The $10,000.00 question is who will or will not show up to buy the auction.

The market has been under a little pressure all day, primarily due to hedging for today’s 10 year note auction (21 billion)

The market has been under a little pressure all day, primarily due to hedging for today’s 10 year note auction (21 billion). The market seems to be set up for consolidation, but one that will take the yield only a few bps higher. Traders will most likely buy the dip and then repeat the process tomorrow for the 30 year auction (13 billion).

Somewhat of a “let’s see what the other guy does first” type of attitude

25 billion in 10 year notes will be the focus for today as the auction deadline is less than one hour away. No news but plenty of Fed Governors are speaking with traders looking for any clues as to what they have up their sleeve. Lockhart, Yellen, Rosengren, Tarullo, and our very our Dallas Fed governor Fisher are all on the scrambled egg/rubber chicken circuit. For the most part, the day has been quiet with stocks hanging around unchanged and the 10 year note up 6/32’s (yield 3.46%). As far as the auction is concerned, street talk has it that dealers are expecting a “fair” retail showing but not one that will blow the doors off. Somewhat of a “let’s see what the other guy does first” type of attitude.