• FN4.5 -02at 102-03. GN4.5 -03at 102-22.
  
• Secondary Market Current Coupon: +2.4bps at 4.16%
• CC Yield Spreads:+81.3/10yTSY.+72.1/10yIRS. Tighter all day. Vols deflate into NFP
  
• TSYs. 10s:+8.4bps at 3.347%.-23 at 102-05+. 2s least worst performer.+4.8bps at.817%
• S&Ps:+2.58%at 1098.38. HIGH: 1098.49 LOW ON THE OPEN: 1070.54

The pendulum swings one way, then swings the other...but further this time!

Stocks closed near three day highs and benchmark TSY yields went out...near three day highs too! We did manage to make it through the day without reprices for the worse (actually 1 did) though. All because....

Mortgages once again traded well against their benchmark guidance givers... in favorable market conditions. By my scorecard (which is slower than the street), CC yield spreads went out at their tightest levels in recent weeks. The only real difference between the MBS market today and the MBS market yesterday was a tiny uptick in MBS trading volume. Originators were seen taking down forward commitments as benchmark interest rates moved progressively higher..but originator supply was again less than $2bn. BestEx in mortgage rate land favors feeding 5.0 MBS as supply sellers are loving 105 price handles. (Buy up gfee and sell up in coupon)

If you can't see the housing market slowdown from the traunches of origination...the post-tax credit deceleration is more obvious in the lack of loan supply in the TBA market (and there is less when rates drop because servicers are cherry picking the orig. pipeline for duration. 

Remember the "energy storage" release that was discussed in the open? The recent range has consolidated to the point where profiting from profit taking has turned into an hourly task. Either stocks and bonds were making more room to react to tomorrow's scheduled data or we're seeing the beginnings of the end of the position trimming process before nonfarm payrolls.

Volume has trended lower as the week has progressed (all two days of it). Plus what sold off yesterday in stocks is what rallied today.  Remember the Energy sector was the biggest loser yesterday? It was the biggest winner today. +4.28%. After that: MATERIALS FINANCIALS AND INDUSTRIALS headlined the leaderboard.

I would be in the "getting flat" group because I wouldn't want to be messing around with small profit taking opportunties in what is an environment of lessening liquidity. Those with better execution won't mind a little ride on the float boat though....

I hear 45 and 60 day locks were a popular commitment period on lock requests. Does that mean you are nervous about closing your homebuyer tax credit loans by June 30?