Tuesday, May 10, 2011


Today looks to be a repeat of yesterday with bond prices and 10y Treasury yields relatively flat in anticipation of Thu and Fri PPI & CPI numbers.
Yesterday closed at 100.469 (FNMA 4.0 coupon) a +12bps for the day but consider we opened with a -6bps the day had basically no movement. Keep in mind the pricing levels as most are switching their watch now to the FNMA 4.0 instead of the 4.5 coupon so do not be caught off guard. The difference in pricing on these is appx 300bps so dont be alarmed at the price shown.
Today opened with a small -6gap down and been flat since.
I do not see anything that makes me think we are going to break out of this very tight and light trading range today or tomorrow.
Expected range 100.35 - 100.5

Lock advice
if closing in 7-10 days - LOCK
if closing in 14+ float cautiously/lock

Calls today are repeat of yesterday there are no technicals to indicate a change

Make it a great day

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