Traders work on the floor of the New York Stock Exchange Futures Mixed Higher as Volatility Swirls

Mortgage bond prices opened weaker this morning erasing most of the gains from yesterday afternoon. There was no data this morning. We have a 3Y note auction this afternoon. News out of Europe overnight is very tame. Nothing moving the markets much and things remain shockingly quiet. This is a stark contrast to the volatility out of the euro zone as of late. Stock futures are sharply higher. Stocks and bonds often trade inversely, though not always the case. Spains "bailout" (THOUGH commentators are careful not to use that word, but let's call it what it is) still is factoring into trade. The eurozone stepped in and helped Spain's banks with $125 billion of assistance. The last thing Europe needs is additional defaults. Greece is already rumored to be leaving the euro, they can't add Spain to the fears without dire consequences. In the short term this rescue package helps, in the long term things still look dire. Spain is now the fourth on the list of countries the eurozone have bailed out....Portugal, Greece, Ireland. Italy is also in bad shape. France isn't without woes. Some analysts this morning say the recent steps are only a bandaid and we will revisit Spain's woes again in 30 days. We shall see. This morning represents a forward drop for MBS traders. The front month for delivery has rolled to July. This is a technical aspect of the bond market and has no real impact on daily rates. Secondary managers have been pricing into the July coupon for several weeks. What is most noticeable is the drop in bond prices as forward months fall approximately 8/32s to 10/32s. />