Mortgage Backed Securities are minus 28bps this morning.

Chairman Bernanke stated in his semi-annual testimony that the Fed is ready to step in and try untested measures to stimulate the economy if it falters. That signaled to investors that another round of quantitative easing maybe in the cards. Just two weeks after the Fed stopped QE2 there is more talk of easing. This has investors cheering and running for the exits in the bond markets and rushing into equities.

China announced GDP grew at 9.5% in the second quarter and that was slightly above expectations. That is good news for investors that one economy is not suffering and can purchase our goods and services. That will also allow China to purchase more of our debt. With two more auctions looming this week.

Fitch announced that an Italy austerity measure could stabilize the countries rating. That may put an end to Eurozone debt crisis talk for the rest of this week.

There is no other economic news being released today. We will see the results of today's auction at 1:00. The stock markets will be left to digest the Chairman's remarks and move the markets accordingly.

Milwaukee Mortgage Rates appear to be headed up in the near future.

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