MBS is holding strong while TSY yields rise...spreads are now 3-4 ticks tighter in the short end of the stack.  Still slightly wider to swaps though...

310 marks...

FN30__________________________________

FN 4.5 -------->>>> -0-07 to 100-26 from 101-01

FN 5.0 -------->>>> -0-05 to 101-29 from 102-02

FN 5.5 -------->>>> -0-04 to 102-15 from 102-19

FN 6.0 -------->>>> -0-05 to 103-01 from 103-06

The Federal Reserve completed $19.867bn Agency MBS transactions between February 12 and February 18, 2009.

75% OF THE $19.867BN WAS SPENT ON 4.5 COUPONS!!!

Now do you see how the Federal Reserve supported the short end of the coupon stack during the heat of the "up in coupon" day trading strategies....

Thank you Federal Reserve