21 billion of 10 year notes just crossed the block to yield 3.119% with 42% going to indirect bidders (not bad as the average is 37%). Trouble is, the issue came with a lions tail of 1.65 bps and a weak bid to cover of 3.09 to 1 (average is 3.17). We would give this one a C as street dealers (Wall Street) took down a good chuck of this and will need to redistribute the paper. Auctions results have put a little more pressure on the market with the 10 year now off 20/32’s. Mortgage backs are down 9/32’s. Technically, today’s trade has pushed below the 38% fibo retracement level, creating a new sell signal on 14 day slow stochastics. MACD and RSI have joined the bears party as well. Although volume remains light, bond bulls seem to be losing their swagger. Time to get a little more defensive on the market.
Time to get a little more defensive on the market
About the Author: Max Leaman Austin Mortgage
Great Rates, Low Fees, Close on Time® – (800) 301-3405 Since 2001, Leaman Team has helped clients to purchase, refinance and renovate. The biggest distinction between lenders is their honesty, customer service, and ability to close on time.
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