After three days of stocks declining, this morning they are on the upswing having the following effect on Mortgage Backed Securities:
MBS are down -7/32 (FNMA 30-yr 3.0 at 104.03), which is about 1/32 lower than yesterday at this time. Favorable repricing took place yesterday. Early investors may have priced at much higher levels.
Hints that the European Central Bank (ECB) may expand its aid programs caused investors to shift to riskier assets, and MBS moved lower this morning. The Dow is up 50 points. New Home Sales will be released at 10:00 et. The results from the 5-yr Treasury auction will come out around 1:00 et