May 8th Mortgage Market Wrap-up 3

Mortgage backed securities (MBS) closed even on the day at 103.97 having remained wedged in between resistance offered by the 200 day moving average above and support offered by the 100 day moving average below.  The stock market continued its advance, albeit slowly.  At the same time MBS bonds were buffeted by a headwind created by a 10 year Treasury sale in the amount of $24 billion today.  The sale, which merited only a D+ rating, was challenging in that the 10 year maturity is in competition for the same dollars that buy MBS bonds.  The 30 year fixed remained at 3.50% today.