MBS OPEN: Holding to Friday's Rally, But Not For The Right Reasons...

MBS staged an impressive late day rally on Friday.  The day after Thanksgiving is "bring your kids" day on wall street.  Perhaps some "little fingers" inadvertantly found their way to the "buy MBS" button.  The point is that Friday is one of the lowest volume days of the year that sees the absence of numerous market participants.  As such, the bullishness is taken with a grain of salt.  It would be more reassuring if we could hold those gains into monday morning.  And we have!

But all is not well...  And for a simple reason: treasuries are at all time low yields.  So as is a common theme this year, we have to wonder if MBS would be improved 4 ticks this AM to 100-29 in the 5.0 if treasuries weren't at ridiculously low yields (10- 2.88, 5 - 1.87, 30 - 3.38).

In about an hour and a half, we'll get construction spending and the ISM index.  There are also scheduled speeches by such notable characters as Bernanke, Dallas Fed's Fisher, and Paulson.

Dow Futures are off almost 200 points, oil's at 51.40, ECB rate cuts are shaping up to be deeper than expected, and LIBOR is cheaper at the open.

Stay tuned, but so far so good...