Daily Commentary by Larry Baer: This week's Treasury Department $99 billion auction of 2-, 5- and 7-year notes will likely exert the greatest influence on the short-term trend trajectory of mortgage interest rates. Treasury will kick things off with the sale of $35 billion of 2-year notes tomorrow followed by $35 billion of 5-year notes on Wednesday and they will wrap-up their borrowing spree with the sale of $29 billion of 7-year notes on Thursday. If these three auctions draw decent demand (a 50-50 proposition at best as I write) mortgage investors will likely breathe a sigh of relief and push mortgage interest rates lower toward the end of the week. If Uncle Sam is forced to "sweeten-the-pot" by dropping his price in order to attract the required capital - it is almost certain mortgage investors will respond by pushing their rates higher as well. Each of these auctions will conclude at 1:00 p.m. ET and I will post results on the website as soon as possible thereafter.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
