FNMA 4.5% gained 3 bps for now despite the 40 billion dollars in 2 year t notes that hit the market today. We are expecting 64 billion worth more in in the next 2 days to add "supply" to the market...and possibly erode rates some. We are still in the 5.25% range on the 30 year fixed.

Existing home sales report came in better than last month but not as good as expected. Many are speculating that it is some of the new government regulation like the "Home Valuation Code of Conduct" that is actually stunting sales of homes. The good news: the "inventory" of existing homes for sale is now down to 9 months...vs up to around 12 months where it was early this year.

Oil was up $1.74 to just under $70/barrel as the dollar weakens with all the t-notes on the auction block. So: the price may not have changed when expressed as a price in another currency that didn't get beat-up today.

The Final note: the 2 day FED meeting started today and we will expect to hear whether or not they will commit to purchasing more long term bonds on Wednesday when the notes are released. Nobody is expecting them to raise the fed funds rate which is currently at "zero to 1/4 point" and holding.

Have a great evening!