May 24th Mortgage Market Wrap=up 2

Mortgage backed securities (MBS) closed down 19 basis points at 104.19 having fallen below the resistance offered by the recent high close.  As is typical on holiday weekends, the number of traders diminishes quickly as the holiday itself approaches.  The result produces light trading which means that a small number of trades can affect the market.  Today's loss was a result of this dynamic.  Today's Treasury auction only garnered a B minus rating but had little effect on the day's results.  The 30 year closed the day at 3.875%.