Mortgage backed securities and treasuries opened in opposite directions this morning.   MBS opened a few ticks worse than yesterday, while the benchmark 10 year treasury note opened at 2.30, down from yesterday’s close of 2.32.  The early morning weakness with MBS resulted in lenders worsening rate sheets.

The only economic data released this morning was Import/Export prices which gives investors a gauge on inflationary or deflationary pressures.  Import prices fell a better than expected -.5% while export prices fell more than expected by -.2%.    Both reports came in close enough to expectations to not have any impact on this morning’s trading.

Both MBS and Treasuries traded throughout the day in a very tight range.  MBS underperformed treasuries trading within a 6 tick range while the benchmark 10 year note traded between a low of 2.29 to a high of 2.32.  No lenders were reported to have repriced.

The downward trend in rates continues to hold.   The most prevalently quoted conforming 30 year fixed rate continues to hold at 4.125% for the best qualified consumers.

The US stock and bond markets will be closed on Monday in honor of Columbus day.  Our next update will come on Tuesday.