The last potentially notable event on today's calendar is the 7yr Treasury Auction coming up at 11:30am. 7yr auctions aren't typically something markets care much about, and today's is only really worth mentioning on a relative basis--that is to say, 'relative' to the barren wasteland that is the Christmas week trading environment. In such an environment, Treasury auctions are one of the few things that FORCE a certain pre-determined amount of bond market volume to be transacted.
That's why yesterday's 5yr auction caused as much of a stir as it did. It exposed a fragility in the thin conditions. Even after a significantly weaker morning, the yields still weren't high enough to attract more than 2.39 dollars bid for each dollar auctioned--right in line with multi-year lows. Considering 7yr auctions are even more challenging for market participants (not a big market for 7s), the safest play was to sell, sell, sell.
At least today's selling has been more moderate by comparison. Fannie 3.5s are down only 2 ticks at 103-20. 10yr yields, unfortunately just cracked 2.30. Refer to this morning's Day Ahead for thoughts and analysis on that broader weakness.
MBS | FNMA 3.0 100-12 : -0-10 | FNMA 3.5 103-20 : -0-02 | FNMA 4.0 106-10 : -0-01 |
Treasuries | 2 YR 0.7470 : +0.0037 | 10 YR 2.3000 : +0.0310 | 30 YR 2.8790 : +0.0210 |
Pricing as of 12/24/14 11:19AMEST |