Since 5pm "Going Out" Marks...

FN30________________________________

FN 4.0 -------->>>> -0-02  to  100-00 from 100-02

FN 4.5 -------->>>> -0-01  to 101-25  from 101-26

FN 5.0 -------->>>> +0-00 to 102-31  from 102-31

FN 5.5 -------->>>> -0-01  to 102-21  from 103-22

FN 6.0 -------->>>> +0-00 to 104-17  from 104-17

GN30________________________________ 

GN 4.0 -------->>>> -0-01  to 100-07  from 100-08

GN 4.5 -------->>>> +0-00 to 102-03  from 102-03

GN 5.0 -------->>>> -0-01  to 103-17  from 103-18

GN 5.5 -------->>>> +0-01 to 103-31  from 103-30

GN 6.0 -------->>>> -0-02   to 104-12  from 104-10

Rate sheet influential MBS coupons are bouncing around a range this morning ...much of the same way they have all week/month. Mortgages continue to take their direction from the biases of the Treasury market. As has been widely discussed the gyrations of the yield curve (steeper or flatter) are based upon several factors including the upcoming auction of $101bn in new TSY notes and the sentiments of stock traders.

So we dive into the equity market for some possible indications of the day ahead for MBS....

Early in the trading session Ford's "not as bad as expected" earnings and slower cash burn rate gave stocks the energy and desire to move higher, however since about 10AM, eventhough new homes sales and durable goods data was better than expected, market participants have exposed their lack of a steadfast commitment to open long positions while there is a looming concern regarding today's private release of the government's financial "stress tests". Although the findings of the "stress tests" will not be made available to the public until May 4,  later today the Fed will release the criteria used to access the health of the 19 financial institutions in question. This will allow market watchers to make their own postulations on the health of the financial sector. That said...financials should provide leadership in the equity market today.

At the moment stocks are off their highs of the day...the Dow is up 0.88%, the S&P is up 0.83%, and the NASDAQ is 0.94% higher.

The yield curve is steeper as 2s vs. 10s have ticked up to 3 bps to 202bps while the long bond reached its 2009 high yield this morning.

All the while, production MBS coupons (4.0s and 4.5s) have been relatively stable and insulated from broad market flows (all quiet on desks). Mortgages are, yet again, outperforming their benchmark big brother TSYs (MBS/TSY yield spreads tighter). Expect more sideways action from MBS while the rest of the world goes back and forth on "what to expect" and "how to trade it"..... THAT MEANS STOCKS MAY MOVE IN A VOLATILE MANNER TODAY....and MBS should remain a bystander...that is unless a tape bomb changes the long term convictions of debt investors.