Mortgage bond prices remain lower Wednesday morning applying upward pressure on mortgage rates. Rates are under pressure from positive stocks where the DOW Jones index was higher by 40-points. Traders will watch stocks and the testimony from Ben Bernanke was they await the outcome of the $21B 10-year auction. Market participants are hopeful foreign accounts show up and help bid prices higher keeping rates low. The US relies on foreigners to fund our deficit spending through Treasury auctions. If China does not show up to the party, rates will suffer. Results are expected by 1:15 pm ET. Lastly, this afternoon the Fed will release the Beige Book, which provides insight into the economic condition of the Fed districts. Be very careful today, at 10:00 ET stocks were higher and Mr. Bernanke started speaking. Big Ben will speak directly from a script, being very careful to not rock the markets. However if something he says moves stocks higher, rates will suffer. If rates are under pressure ahead of the auction, things could get ugly.
Carlos Figueira - Keypoint Mortgage 