Different day - same story.



It is another very slow start to the trading day in the mortgage market. Mortgage investors are putting the finishing touches on their risk management strategies in front of tomorrow morning's much anticipated speech by Fed Chairman Bernanke.
Many market participants are hoping Mr. Bernanke will use his time at the podium to announce a new monetary policy stimulus program designed to avert the immediate threat of another recession will soon be forthcoming from the Fed. It is far more likely he will discuss the various methods the Fed has at its immediate disposal to provide additional lift to the struggling economy - and he will reaffirm his commitment to act decisively should the need arise -- but Mr. Bernanke will probably stop short of making any "big bang" announcement.


If this assessment proves accurate -- look for the stock market to sell-off while mortgage interest rates move sideways to perhaps fractionally lower. Mr. Bernanke is scheduled to begin his address at 10:00 a.m. ET.



The Labor Department reported earlier this morning that the number of Americans standing in line to file first-time claims for government unemployment benefits jumped a stronger-than-expected 5,000 to 417,000 during the week ended August 20th. A Department spokesperson said at least 8,500 new filings last week were attributable to the Verizon strike. Even without the distortions created by the Verizon strike - the data continues to clearly show labor market conditions remain grim.



Uncle Sam will wrap-up this week's three-part Treasury debt auction series with the sale of $29 billion worth of 7-year notes this afternoon. Early indications suggest the auction will draw solid demand from foreign and domestic investors alike. Investors have been migrating to the longer dated securities as they grab for yield following last month's commitment by the Fed to keep short-term interest rates near zero for at least two years. If this assessment proves accurate, this event will tend to be supportive of steady to perhaps fractionally lower mortgage interest rates.