4/6/10

Most rate prices improved a bit today as mortgage bonds regain some losses from Monday. Mortgages are benefitting from Treasury bonds’ first positive movement in 4 days ahead of today’s 3-year auction and Fed minutes release, due out around 10am and 11am respectively. Bonds are benefitting this morning from renewed concerns the Greek bailout plan will unravel. However, continued signs of economic recovery are prompting investors to seek out riskier assets away from bonds. This week’s auctions will be very telling as demand is expected to be less the strong for today’s 3-year, tomorrow’s 10-year and Thursday’s 30-year. Watch out for volatility as the auction results come out just an hour before the Fed minutes.