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Daily Market Update 3/11/09

Rates were little changed Wednesday ahead of this afternoon’s auction of 10-year Treasury notes. Tuesday’s stock market rally hurt Treasury yields, but had a lesser impact on mortgages. Stocks moved higher again today following the Obama Administration’s release of plans to use capital injections as an incentive to get US banks to sell distressed securities to investors. The Treasury will provide private investors with government financing that will let them leverage their money to buy toxic assets, thereby increasing potential rewards. The government will then inject bailout funds into the banks to help replenish their capital and acknowledge losses. The strategy is intended to revive trading in mortgage-backed debt, and if successful, could help keep rates low. No economic data will be released today. Retail Sales figures for February will be released Thursday.

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