Fixed Income Recap

Treasuries
The two-year finished the day up 3/64, and the ten-year was higher by 25/64. The benchmark curve was unchanged on the day and remains at +182 bps. A basis point represents .01%.

Today’s $23.9 billion seven-year note auction was better received compared to yesterday’s. The bid/cover ratio on the auction was 2.52. The bid/cover ratio is the dollar amount of bids received over the dollar amount of Treasuries actually sold at the auction. A higher bid/cover ratio signifies higher demand.

MBS
Agency MBS were mixed today, with higher coupons outperforming. Fannie Mae 4.5% 30-years were unchanged on a spread basis, while up in coupon 5% and 5.5% 30-years were tighter to Treasuries by 9 bps and 10 bps each.

TIPS
Today the on-the-run ten-year rallied 1.05% and the TIPS ETF (TIP) was up 1.12%.

Have a great evening.

Cliff J. Reynolds Jr.
Junior Analyst