Mortgage backed securities(MBS)prices sold off overnight, erasing gains from yesterday

U.S. trade deficit narrowed to the smallest in six years as the recession pushed oil prices and consumer spending lower.

Mounting job losses, lack of credit and global downturn signal both imports and exports will slide further.

Treasury auctions record amount of 10yr notes today; strong demand exists still evidenced by bid to cover ratio of 2.67 to 1 for yesterdays 3yr note auction. 30 yr notes auction tomorrow along with significant economic data being released.