Any risk that had been increasing earlier is out the window for now. Treasuries just moved quickly to their best levels of the day. The move began just before 1:30pm and causality is unclear for now.
Whatever the case, 10yr yields dropped from 2.52 to 2.506 fairly quickly. Herein lies the “relative” qualifier in the title, because that’s not much of a movement on an average day, but looks big against the backdrop of abnormally narrow ranges.
10’s are already back up to 2.511 and MBS are holding around 102-22 in Fannie 3.5s. Long story short, it’s not a sustained move of epic proportions, but whereas we were heading in to the auction near the worst levels of the day, we’re currently sitting near the best levels of the day.