market close

MBS  - 5/32 @ 102.11      10 Yr T    - 4/32 @ 1.9670    DOW  -19 @ 15,335

 

Since the release of the stronger than expected April Employment report on May 3, investor sentiment toward bonds has turned more negative, as labor market improvement brings the end of the Fed's bond buying program closer. During this time, most rallies in MBS have been met with additional selling. On Wednesday, investors will hear testimony from Fed Chief Bernanke and will see the Fed Minutes from the last meeting. The consensus outlook is that the Fed will not begin to scale back its bond buying program until early next year, but investors are becoming increasingly concerned that it will take place sooner than that. It is believed that the Fed officials in favor of tapering the bond purchases are still in the minority, but recent comments suggest that support is slowly growing. No economic data will be released tomorrow. On Wednesday, Fed Chief Bernanke will testify and the Fed Minutes from the May 1 Fed meeting will be released.