Yesterday, Treasury prices dropped as initial jobless claims fell and existing home sales jumped more than predicted. Today, Treasuries are relatively flat to yesterday’s close. With no economic data, Treasuries and mortgage bonds will take their queues from equities.
Yesterday, mortgages held strong on the prospect of a second round of quantitative easing and on the strength of the 5-year notes auction which drew the lowest yield since the government began quarterly sales of the securities. No real economic news is scheduled for release today, but we have a 7-year note auction at 1 p.m. and three Fed speakers on tap.