• Bonds traded either side of unchanged early in the day
• Little, if any response to GDP
• Bigger move seen after the end of the auction cycle
• Not a huge rally, but enough to re-enter previous range

Bond market reaction to Treasury auctions has been sporadic at best for several years now.  They're just not the market movers they used to be.  But occasionally, the overall start and stop of an entire week's auction cycle does something to change the tone and shift the balance of buying and selling. 

Long-time MBS Live member Jeff Anderson coined the term "PSR" long ago, which stands for the proverbial "post-supply rally" that we hope to see after the last auction of any given auction week.  Today was that day for the current week and indeed the broader tone brightened immediately following the completion of the 7yr auction at 1:01:30pm (Treasury says the auctions end at 1pm, but the results don't come out for another 90 seconds).

10yr yields fell quickly, making it all the way as low as 1.81 before pulling up just a bit heading into the close.  Fannie 3.0s added 6/32nds and most every lender issued improved rate sheets in the afternoon.  The only caveat is that tomorrow is month-end, and we may be seeing a bit of extra buying demand due to money managers that are required to hold a certain balance of bonds by tomorrow's close.  As such, we'll be very curious to see how things are looking on Monday morning.