The macro-economic calendar is very thinly populated this week -- so the trend direction of mortgage interest rates will be largely influenced by the Treasury auction schedule and trading action in the stock markets.

The Treasury Department will conduct four auctions this week for the first time since they began issuing securities regularly in 1976.  Today's $8 billion auction of 10-year inflation-indexed notes will be followed by the sale of $35 billion of 3-year notes tomorrow, $19 billion of 10-year notes on Wednesday and $11 billion of 30-year bonds on Thursday.  That is a huge amount of supply for market participants to slog through.  The probability that mortgage interest rates remain unscathed (steady to fractionally lower) during this week's Treasury auction process is about the same as me being struck by lighting as I get out of the car to cash in my multi-million dollar lottery ticket.  It is possible - but definitely not very probable. 

The level of mortgage interest rates will also be influenced this week by trading action in the stock markets.  I see reason to believe the Dow will find a bottom (between 8200 and 8130) from which to launch a counter-trend rally before the market close on Friday afternoon.  If my assessment proves accurate, rising stock values will tend to produce fractionally higher mortgage interest rates as investors move capital (out of the relative safety of Treasury obligations and mortgage-backed securities) into riskier but higher yielding investments such as stocks. 

Today's conforming 30 year fixed rate is at 5.375%.