Your rate sheet influential MBS coupons are having some trouble breaking through topside resistance levels...the FN 4.0 traded up to its intraday highs but gains were quickly reigned in once the 4.0 ventured too far into premium territory (over par)...

Stocks have proven volatile late in recent trading sessions...stay alert!

FN30________________________________

FN 4.0 -------->>>> +0-05   to  100-01 from 99-28

FN 4.5 -------->>>> +0-03   to 101-26  from 101-23

FN 5.0 -------->>>> +0-02   to 102-30  from 102-28

FN 5.5 -------->>>> +0-00   to 103-20  from 103-20

FN 6.0 -------->>>> +0-00   to 104-15  from 104-15

GN30________________________________ 

GN 4.0 -------->>>> +0-03  to 100-05   from 100-02

GN 4.5 -------->>>> +0-02  to 102-02   from 102-00

GN 5.0 -------->>>> +0-02  to 103-16   from 103-14

GN 5.5 -------->>>> +0-01  to 103-29   from 103-28

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

A few notes on the economic data releases this morning...

Jobless Claims continue to trend higher while continuing claims, a less volatile indicator of the health of the labor market, recorded another record reading. If you are hunting for a reason why market participants are still searching for a bottom, you can add the labor market to the rap sheet. The steep increase makes it easier to see why people are hesitant to allocate new working money to the market doesnt it?

To illustrate the previous (last blog post) suggestion we made that prospective refinance-able homeowners are risking their eligibility by waiting to "jump off the fence" until summer....continuing job losses will  logically erode the demand for housing which would imply home equity may continue to evaporate as market supply of available homes remains at all time high levels.

On the other hand there are some positives one can take from the recent Existing Home Sales (NAR EHS) report. First, the rate of contraction (second derivative) has shown signs of slowing its pace. It appears that Obama administration homeowner programs, Fed MBS buying, and the GSE foreclosure embargo are all providingsome stable (low vol) to the stabilize the housing market. Since the beginning of these programs the rate of decline as slowed and month over month trend has gone...guess what direction...SIDEWAYS!!!!

Lawrence Yun, NAR chief economist, had this to say...."The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey," he said. "Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans."

So hopefully originators are not ignoring their purchase marketing.....

At 3pm the Fed will announce how much MBS they purchased over the last week...