Mortgage bonds hold steady

Markets opened relieved, but slightly lower after the Greek elections indicated a pro-bailout accepting government was voted in. However, Spain was quick to steal the attention of investors as their debt rate hit all-times highs since joining the Euro. Here in the U.S., the economic report schedule is very light this week, with the exception of this month’s 2 day Fed meeting concluding on Wednesday. There is clearly a high expectation that some form of a QE3 must be closer to reality, and Ben Bernanke’s comments will be dissected for clues if it’s not made obvious. Mortgage bonds are holding steady and that will keep interest slightly higher than their all-time lows. We will suggest a cautious floating bias for today.