Quick check on the markets...

S&P futures briefly broke 1070 resistance but have since then fallen back below this all-important pivot. S&Ps are currently +1.50 at 1068.50. Trading volume is low....

Benchmark yields are marginally higher across the curve. The 2-year note is 1.2bps higher at 0.633% and the 10-year note is 2.1bps higher at 3.059%. After repeated tests of 2.98%, the 10yr note finally shot through this support level, just in time for auction supply next week! The safen haven bid has slowly deflated this week...

Rate sheet influential MBS coupons have performed well vs. benchmarks this week. Although we've back away from new record high prices, yield spreads are tighter and lenders have kept the best par mortgage rate pricing in a range between 4.375% and 4.625%. The August  Fannie Mae 4.0 MBS coupon is +0-01 at 101-02 and the August FNCL 4.5 is -0-02 at 103-12. The secondary market current coupon is 3.808%. Yield spreads are at their tightest levels of the week...

The empty econ calendar, congressional vacation ,holiday shortened work week is coming to an end with little fanfare. Trading volumes are low and non-automated investor attention is lacking. While mortgage rates have made it through the past few days essentially unchanged (best pricing ever on Wednesday btw), related markets are starting to signal a potential shift in sentiment. To be more specific, stocks appear to be a little less risky and longer dated interest rates are slowly rising out of double dip territory. Earnings week starts on Monday with Alcoa and  20 others including three major banks will report by Friday. If stocks are able to extend the low volume relief rally that took place this week...floating in the short term wouldn't be originator friendly. REMEMBER: LOAN PRICING AROUND PAR WILL SUFFER THE MOST IF MBS PRICES FALL