Good morning Mortgage world....

Mortgages are once again under some selling pressure this morning as TSY yields continued to rise overnight. Yesterday TSY yields reached the highest levels of the week following  weak investor demand for 5 year notes.

After a steady run of above average supply offerings we expect that mortgage bankers will be slowing their pace of selling (committing new loans) today. If the yield curve continues to steepen up and absolute prices of MBS have the opportunity to cheapen up a few ticks (32nds) we may be in store for a period of strengthening MBS which would allow lenders to pass along secondary market gains with a little less anxiety over their ability to protect their pipeline from interest rate risk. Tape bombs remain an ever present worry for all markets, the Fed will, however, continue to provide mortgage price stability from all angles (as long as they are production coupons we hope)

Flat at the open. MBS is tighter to Treasuries (MBS outperforming benchmark big brother).

APRIL FN30_____________________________

FN 4.0 -------->>>> -0-01 to 100-02 from 100-03

FN 4.5 -------->>>> -0-01 to 101-21  from 101-22

FN 5.0 -------->>>> -0-01 to 102-23 from 102-24

FN 5.5 -------->>>> -0-01 to 103-13 from 103-14

FN 6.0 -------->>>> -0-03 to 104-04 from 104-07

APRIL GN30____________________________

GN 4.0 -------->>>> -0-02 to 100-06  from 100-08

GN 4.5 -------->>>> -0-02 to 101-24 from 101-26

GN 5.0 -------->>>> -0-03 to 103-06 from 103-09

GN 5.5 -------->>>> -0-01 to 103-22 from 103-23

GN 6.0 -------->>>> -0-02 to 104-07 from 104-09

EFFECTIVE FED FUNDS: 0.17

LIBOR FIXINGS (all moved higher today)

1 MONTH: 0.5225

3 MONTH: 1.2319

6 MONTH: 1.7944

1 YEAR: 2.0525