The first leg of the quarterely refunding will take place at 1 pm. The Treasury will auction $35bn 3 yr notes. The MBS market is trading in a sluggishly slow manner ahead of the auction which has created some choppy price action (see chart  below). The best term I can use to describe the tone on trading desks:  bored

Since 5pm "Going Out" Marks....

FN30________________________________

FN 4.0 -------->>>> +0-03  to 100-04  from 100-01

FN 4.5 -------->>>> +0-04  to 101-28  from 101-24

FN 5.0 -------->>>> +0-03  to 102-27  from 102-24

FN 5.5 -------->>>> +0-03  to 103-20  from 103-17

FN 6.0 -------->>>> +0-03  to 104-20  from 104-17

GN30________________________________ 

GN 4.0 -------->>>> +0-03  to 100-06    from 100-03

GN 4.5 -------->>>> +0-04  to 102-03  from 101-31

GN 5.0 -------->>>> +0-03  to 103-14  from 103-11

GN 5.5 -------->>>> +0-01  to 103-26  from 103-25

GN 6.0 -------->>>> +0-01  to 104-12  from 104-11

UST10YR: 3.1687%

2s/10s: 219.81 bps

DOW: -19.99 to 8406

Will alert if sentiment changes...beyond that we are range bound.

FYI

RE: JP MORGAN CHASE CORRESPONDENT LENDING (kind of redundant when you consider that they don't offer broker channel anymore)

"Chase Correspondent "is making a very significant change to our DU Refi Plus offering and is delaying the implementation of the maximum LTV to 105%. In DU 7.1 May Update Release Notes, Fannie Mae announced the availability of the DU Refi Plus program up to a 105% LTV through DU effective the weekend of May 2, 2009. After careful re-evaluation of the opportunities and risks associated with the DU Refi Plus program, Chase Correspondent Lending will make the following revisions to our DU Refi Plus offering: At this time, Chase will not expand DU Refi Plus to a 105% LTV. Additionally, Chase will now require that the original loan must be Chase Serviced in order to be eligible for delivery to Chase as a DU Refi Plus."

So...this DU REFI PLUS thing is not picking up steam. Its hitting roadblocks...BOOOOO HIIIISSSSS !!!