Over the next three days, the Treasury will be auctioning off a record high $183 billion in shorter-term Notes.  T-Bills are a direct competitor with MBS for the same investor dollar, so the large bump in supply this week could drive down the demand for mortgages on the open market. Diminished demand leads to price reductions/yield increases (higher interest rates).

However, we may see investment dollars shifting again from stocks to bonds.  Coming off a record high close of 5,254 at the end of March, the S&P has lost 5.4% of its value over the last three weeks.  That slump in stock valuations may trigger sell orders, and those proceeds will be used to gobble up the large supply of bonds being marketed this week.

Speaking of supply and demand, today is Earth Day.  There’s only one habitable planet in the solar system (despite what the crazies tell you), which makes it priceless.