Good Morning.

6-3. Caps win. Pens lose. I am happy. Check out the headline....

The econ calendar is essentially empty today but there are a few events that are expected to move money. We get Fed speak from FRBNY President Bill Dudley at 12:15, then Chairman Bernanke will share his sentiments at 1:30, and last but not least we hear from the lone FOMC dissenter, Thomas Hoenig, at 2pm.

In between the barrage of rates policy rhetoric, the US Treasury will auction $21 billion 10 year notes.

The FN 4.5 opened +0-05 at 99-21 but lost positive price progress quickly. The FN 4.5 is currently +0-02 at 99-18 yielding 4.559%. The secondary market current coupon is 4.582%. The current coupon is now 62.4 basis points over the 10 year TSY note and +65 basis points over the 10yr swap rate. "Rate sheet influential" MBS yield spreads are TIGHTER to start the session. It's like the Fed never left....

The short end of the yield curve is the best performer today.  The 2 yr note yield is 3 basis points lower and the 5 yr note is 2bps better. This is likely a function of market participants viewing the FOMC Meeting Minutes as "dovish" ---which basically means the Fed continues to support low interest rates.

Stocks have opened lower which has added some support to the bond market. The 10 yr note auction and Bernanke's speech will be the most influential events of the day. Yields will bounce around before these events...don't expect too much movement in either direction without a quick consolidation and reversal. RANGE BOUND UNTIL NEWSWIRES START PRINTING HEADLINES.

 Mortgage rates should be similar to slightly better comapred to yesterday.

NEXT EVENT: BILL DUDLEY AT 12:15