Home Page U.S. mortgage bonds edge lower in modest trade NEW YORK, March 26 (Reuters) - Prices of U.S. mortgage bonds opened lower early on Friday in line with U.S. Treasuries, which have been locked in tight range this week. Mortgage bonds fare best in a steady yield climate because monthly prepayments are predictable, which makes it easier to hedge these securities than when yields gyrate. Mortgage lenders were light sellers early Friday after unleashing $2 billion in supply on Thursday, analysts said. "There has been strong two-way flows," Walt Schmidt, manager of mortgage strategy and research at FTN Financial said of this week's steady buying and selling of MBS. Fifteen and 30-year MBS were unchanged to 6/32 lower. Bond equivalent yields on 30-year, 5-percent MBS were up 3 basis points to 4 basis points higher than late Thursday. The yield on 10-year Treasury notes <US10YT=RR>, a proxy for U.S. 30-year mortgage rates, was at 3.78 percent early on Friday, up from 3.74 percent at Thursday's close. So far this week, the 10-year yield has bounced within a narrow range of 3.70 percent to 3.78 percent. Fears over prepayments have been eased somewhat by this week's steady yields, but Treasury yields could easily be affected by any surprising data on the U.S. economy, especially on job growth which has been stagnant, analysts said. Treasury yields were higher early Friday after data showed that U.S. consumer confidence proved not nearly as weak as analysts had forecast and an upward revision in a key inflation gauge. More News: 3-26-04 Consumers More Sanguine, Spending Less 3-26-04 Dividend Tax Changes Cause Headaches for Some Taxpayers 3-26-04 US consumer spending growth decelerates, hit by job fears 3-26-04 Economy, war spur protests 3-26-04 Financial Sector Job Drain Not Over 3-26-04 GDP growth suggests economy on upswing 3-26-04 IRS tells investors feeling robbed doesn't count for deductions 3-26-04 Mortgage rates edge up 3-26-04 Most U.S. companies plan more outsourcing-survey 3-26-04 Tax refunds less than predicted 3-26-04 US consumer confidence improves 3-26-04 U.S. Economy: Personal Spending, Confidence Climb 3-26-04 U.S. EPA may revise vehicle fuel economy tests 3-26-04 U.S. Personal Spending Rise Is Smallest in 4 Months Financial News

 

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