MBS OPEN: HIGHER RATES THUS FAR

MBS prices are down at the open after some overnight selling on the long end of the TSY yield curve. As TSYs sell MBS will too be under the same pressure (spreads tighter when TSY sell)...we welcome this as lower absolute prices helps to make room for mortgage rates to move lower in the not so distant future.

Mortgage Banker MBS selling was our enemy yesterday...when prices of MBS are considered expensive, supply of new loans hitting the market will not be met with willing demand (at those prices). This occurred early afternoon yesterday which forced a few lenders to protect their pipelines with a reprice for the worse. Considering that this reprice trend was not widespread and MBS was unable to mount a sustainable rally following the sell off, it is safe to assume that lenders will publish slightly higher mortgage rates today (given the current bid).

APRIL FN30_____________________________

FN 4.0 -------->>>> -0-04 to 100-02 from 100-06

FN 4.5 -------->>>> -0-06 to 101-21  from 101-27

FN 5.0 -------->>>> -0-05 to 102-23 from 102-28

FN 5.5 -------->>>> -0-06 to 103-08 from 103-14

FN 6.0 -------->>>> -0-01 to 104-03 from 104-04

APRIL GN30_____________________________

GN 4.0 -------->>>> -0-06 to 100-06  from 100-12

GN 4.5 -------->>>> -0-07 to 101-24 from 101-31

GN 5.0 -------->>>> -0-07 to 103-04 from 103-11

GN 5.5 -------->>>> -0-08 to 103-18 from 103-26

GN 6.0 -------->>>> -0-03 to 104-06 from 104-09

EFFECTIVE FED FUNDS: 0.17

LIBOR FIXINGS

1 MONTH: 0.5200

3 MONTH: 1.2275

6 MONTH: 1.7750

1 YEAR: 2.0287

Stock Futures currently indicate a modest open to the upside

Durable Goods Orders at 830am. New Home Sales at 1000am. The Treasury will auction $34 billion 5 yr notes at 1 pm...this auction is of little more importance to MBS than yesterday's 2 yr note auction (which had a great turnout). Treasury Secretary Geithner will speak at 915am before the Council on Foriegn Relations.