Market Analysis

Bonds are up and stocks down slightly this morning.  Yesterday's 3 year Treasury note auction was well bid with 2.76 bid/cover ratio.  This means that the Treasury Dept received approx $107 billion in bids for the $39 billion auctioned.  Today the Treasury Dept will be auctioning $20 billion in 10 year notes.  On Thursday $12 billion in 30 year bonds will be auctioned.  The Federal Reserve is expected to purchase $1.5 billion of today's 10 Year offering.  The Fed has approx $7 billion remaining in it $300 billion program to purchase Treasury notes which will be used during the remainder of October. 

In economic news, the Mortgage Banker's Association (MBA) reported that their purchase applications index was up 13.2% vs last week down 6.2%.  Their refinance index was up 18.2%.  Refinance applications made up 2/3 of all mortgage applications.