It was a slow day in the fixed income market's yesterday. Mortgage rates were mostly unchanged as prices of mortgage backed securities bounced around a tight range before closing near the same level in which they opened the day. Treasuries also moved sideways in slow and sluggish trading. A general lack of market moving data and information was to blame for the quiet session.
The only potential market mover today will occur at 1pm when the U.S. Treasury Department auctions $39billion 3 year notes. Auction demand, as measured by the bid to cover ratio, is the market's preferred gauge of the auction's success. Strong demand helps keep the prices of Treasuries high and yields low. Because Treasury debt securities set the benchmark for the rate of return on riskier fixed income investments, Treasury auctions have the potential to affect MBS prices and mortgage rates. Despite record borrowing by our government, demand for our nation’s debt has remained very strong. ...