Mortgage backed securities (MBS) prices fell at the opening but have since recovered. Stocks worldwide gained paring demand for the safety of fixed income assets.

Strong demand for last week's Treasury auctions was a major reason why mortgage rates gained 19bps despite the rising stock market. Investors will be keeping an eye on the level of foreign interest in buying U.S. debt. If demand for U.S. Treasuries falls, then interest rates on mortgages will likely move higher.

Today the Treasury International Capital data will offer the latest on foreign demand for U.S. securities, especially the Chinese, the largest holder of U.S. debt, including MBS. The big economic news this week will be the Fed Open Market Committee (FOMC) meeting on Wednesday. Cutting rates is no longer an option, but the Fed may announce additional measures to stimulate the economy. The most significant economic data this week will be the monthly inflation reports; Producer Price Index (PPI) on Tuesday and Consumer Price Index (CPI) on Wednesday. Higher inflation leads to higher mortgage rates. Other reports this week include, Industrial Production on Monday, Housing Starts on Tuesday, Mortgage Bankers Association (MBA) weekly applications on Wednesday and Jobless Claims, Leading Indicators & Philadelphia Fed index on Thursday. Also on Thursday the Treasury announces the amount of 2yr & 5yr notes to be auctioned. Fed Chief Bernanke speaks on Friday, rounding out the week.

Today's economic data had little impact; Industrial Production fell in February 1.4% on auto cutbacks and collapsing exports, manufacturing in New York state contracted at the fastest pace on record as orders, sales and inventories plunged, international demand for U.S. securities fell in January reflecting sales of agency debt and China's smallest net purchase since June 2008.

Almost forgot to mention, Tuesday is ST. PATRICK'S DAY!