Mortgage backed securities (MBS) prices are higher (rates lower) in relatively quiet and lackluster trading on monthly "rollover" day as investors speculate that the Fed will increase MBS purchases given the recent rise in mortgage rates.

The monthly rollover switched the current coupon fron May to June, this adversely affected the price 30bps (May closed out at 99.63bps & June opened at 99.33bps). Because of the settlement, things tend to be a little slower in terms of volume so fewer trades can create more volatility.

No economic data will be released today. Weakness in the stock markets are also helping MBS prices, DOW down 150 points. Fed Chief Bernanke speaks later today after the market is closed.

The Fed is scheduled to conduct three rounds of bond purchases this week. The market gets a respite from supply as there will be no government auctions of bonds or notes until late May.