Trading activity in the mortgage market this morning is once again sparse as many market participants are away from the office for this holiday-shortened week. 

Those traders still at their desk are nervous about this afternoon's record setting $38 billion 2-year note auction that will be conducted by the Treasury Department (auction will conclude at 1:00 p.m. ET).  The seasonal timing of this financing effort is poor and the government may have trouble selling these securities without bumping up the return to investors.  A higher yield on today's 2-year note offering will not bode well for the prospects of strong demand at tomorrow's $28 billion 5-year note auction.  Rising yields on these two securities will make it almost impossible for mortgage interest rates to move notably lower for the Christmas break. 

Looking ahead to this week's holiday shortened release of macro-economic data - I don't see anything from Tuesday's final revision to third-quarter Gross Domestic Product figures -- through Wednesday's November Personal Income and Spending report -- that will likely pack enough "punch" to significantly influence the trend trajectory of mortgage interest rates one way or the other.   

Today's conforming 30 year fixed rate is at 5.125%.