Auctions start today…could move bonds either way/Floating Bias

Mortgage bonds are starting the week by holding steady for now, after Friday’s surprisingly better than expected jobs report triggered a selloff.  It was a case of good news being bad news, as investors cringed at the thought of QE tapering becoming a possibility sooner rather than indefinite.  This is a light week for economic reports, but the bond market will have $70 billion in auctions to contend with.  The auctions start today, so the results could move bonds either way.  Stocks continue to hover near their highs, but lack any foreseeable catalyst for now.  We will maintain a floating bias.