Today, Treasury will sell 32 Billion in 3 yr. notes with results possibly impacting trading.

The housing market, while significantly improved, has been rate driven.  The recent increase in rates has already slowed applications and any additional increase would slow things further, which is not what the Fed wants to see.

MBS selling supply is running below recent levels, which means at some point the buying demand should increase, potentionally leading to an improvement in rates.

Today we are seeing that there is no easy way out of the Feds QE3 policy. This morning the 10 yr. note was at 2.28% and US, European and Asian stock markets were all being hit negatively. 

The new concern is is that the Bank of Japan has left its monetary policy unchanged.  The yen is strengthening and speculation is that central banks will fail to keep the global recovery on track by not pumping in its expected stimulus.

- Michael Corboy