TSYs continue to rally and the MBS stack keeps on compressing. The lofty prices of MBS and vague prepayment outlook has created "loss of direction" for MBS buyers. The Fed remains an active buyer, as do overseas bidders. Asia's usual bias towards Gn's has faded a bit in favor of the less expensive conventional MBS.
Fn 4.0-> +0-02 to 100-28 Gn 4.0-> +0-06 at 101-04+
Fn 4.5-> -0-01 to 102-06 Gn 4.5-> -0-02 to 102-26+
Fn 5.0-> -0-01 to 103-00 Gn 5.0-> -0-03 to 103-18+
Fn 5.5-> -0-02 to 103-12+ Gn 5.5-> -0-07+ to 103-25+
Fn 6.0-> +0-02 to 103-25 Gn 6.0-> -0-01+ to 103-28+
We are hoping the intraday downward price pressure subsides and technical support levels hold. As we have said in the past we expect any retracements (selling) to only provide other accounts the opportunity to buy. We are paitently waiting for this trend to continue.