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 Friday's much anticipated speech by Fed Chairman Bernanke.



Many market participants are hoping Mr. Bernanke will use his time at the podium to signal a new monetary policy stimulus designed to avert the threat of another recession. 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.



The Commerce Department announced earlier today that orders for goods manufactured to last 3-years or more posted a 4.0% gain in July on a huge jump in transportation equipment - particularly aircraft where orders were up 14.6%. Things were not nearly so heady for the component of the report that excluded transportation orders -where the July gain was a very modest 0.7%. Overall, the data continues to reflect continued softness in broad sections of the economy.



As they do every Wednesday, the Mortgage Bankers of America have released their mortgage application survey data for the week ended August 19, 2011. Overall loan demand declined 2.4% from the previous week with purchase money requests dropping 5.7% and refinance requests down by 1.7%.



The contract rate for 30-year fixed rate mortgages finished at 4.39%, up 7 basis-points from a week ago, down 18 basis-points from four weeks ago, and down by 16 basis-points from a year-ago. Refinance applications accounted for eight out of every ten applications taken last week.



Mortgage investors are currently doing nothing more than milling around with their hands in their pockets waiting for the results of this afternoon's 1:00 p.m. ET sale of $35 billion of 5-year notes. Early indications suggest the auction will draw solid demand from foreign and domestic investors alike. If this assessment proves accurate, mortgage interest rates will not likely move much in either direction. Only in the off-chance demand is so weak at today's debt sale Uncle Sam finds it necessary to "sweeten-the-pot" by offering a notably higher yield on today's offering of 5-year notes will mortgage investors feel particularly compelled to push rates upward from current levels.