Market Wrap:monthly coupon rollover

MARKET WRAP: Mortgage Bonds had their monthly coupon rollover after the close of trading today. The effect of this rollover was minus 34bp points for the 4% coupon. Therefore, while the Bond quote for today shows minus 59bp closing at 97.66, the minus 34bp rollover adjustment must be accounted for. This means that pricing actually closed down 25bp on the day. A report out from think-tank group Medley Group Advisors, fueled concerns that the Fed may start withdrawing monetary stimulus earlier than expected and pushed Treasury prices lower and spilled over into Mortgage Backed Securities. Stock markets moved higher today as money shifted from the Bond markets and as oil moved a bit lower, Boeing received a $10B from 2 airlines in China, B of A hinted of a possible dividend hike and allies of Gadaffi said were looking at exit plans for the leader. The Dow rose 124.35 to 12,214.38, the Nasdaq jumped 20.14 to 2,765.77 while the S&P 500 Index rose 11.69 to 1,321.82. Oil settled at $105.02/barrel down 42 cents after key oil producers considered increasing output. There are no major economic reports due for release tomorrow. The Treasury will sell $21B 10-yr notes.

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