Ok I am done my morning musings and ready to work...

It has busy session so far as mortgage bankers were quick to dispose of their supply early in the day. The Federal Reserve remains a steady demand side influence while non-tax payer funded accounts turned from net sellers to net buyers. At the close yesterday TSYs were outperforming MBS which means spreads were WIDER. When spreads gap out (get wider) it creates a relative value buying opportunity for MBS market pariticipants....this is when MBS buyers are most likely to return in droves. 

This morning mortgages opened in the red and TSY yields were relatively stable...this meant MBS/TSY spreads were getting wider and it was TIME TO BUY again....which did happen and MBS bids improved off the early morning lows and spreads tightened up a few 32nds. If TSY yields begin to move higher and MBS stays at its current levels...MBS/TSY spreads will further tighten and MBS profit takers will begin to...take profits (haha) and mortgage rates will move higher again. This is our main obstacle on the road to lower rates at the moment....blame the high prices for the anxious flows (buying/selling activity) of the MBS market .

APRIL FN30_____________________________

FN 4.0 -------->>>> -0-00 to 100-06 from 100-06

FN 4.5 -------->>>> -0-01 to 101-26  from 101-27

FN 5.0 -------->>>> +0-00 to 102-28 from 102-28

FN 5.5 -------->>>> +0-01 to 103-15 from 103-14

FN 6.0 -------->>>> +0-00 to 104-04 from 104-04

APRIL GN30_____________________________

GN 4.0 -------->>>> +0-01 to 100-13  from 100-12

GN 4.5 -------->>>> -0-01 to 101-30 from 101-31

GN 5.0 -------->>>> -0-01 to 103-10 from 103-11

GN 5.5 -------->>>> -0-01 to 103-25 from 103-26

GN 6.0 -------->>>> -0-01 to 104-08 from 104-09

PLAIN AND SIMPLE : MBS ARE FOLLOWING THE GENERAL DIRECTION OF TSYs THIS MORNING

We have seen quite a bit of loan supply offered up to the MBS market lately and MBS prices and rate sheets are actually starting to have a better relationship too. That is good everyone! So far this morning rate sheets are actually slightly improved. YAY YSP. I am sure there are lenders who are not participating in the party...theres always a few party poopers though!

Vic gave a nice little update on Durable Goods Orders this morning... READ HERE

Will talk about the MBAA Apps later today...