Mortgage backed securities (MBS) prices are slightly higher (rates stable) in quiet trading amid concerns the government's record borrowing needs to finance a widening deficit will flood the market with debt and overwelm demand.

The Treasury will auction $71 billion of 3yr, 10yr and 30yr securities this week while the Fed prepares for its 15th purchase of U.S. debt.

Trading is closed today in Japan & the U.K. for public holidays.

Construction Spending in March rebounded unexpectedly, up 0.3% led by private non-residential outlays. The private residential component continued its downward trend, falling 4.2%, indicating the housing sector has not yet hit bottom. Pending Home Sales rose 3.2% in March pointing to improvement in existing sales for April and May. Government efforts to lower borrowing costs and unclog lending may be starting to pay off as foreclosure-driven declines in values are putting more homes within reach for more Americans