Mortgage backed securities (MBS) prices are higher (rates lower) after the World Bank cut its forecast for global economic growth this year, causing stocks and commodities to retreat, benefiting fixed income assets like MBS.

The DOW is down 100pts. The dollar is stronger dulling the appeal of commodities as an alternative investment, with crude oil falling to $67.81 a barrel on concern that fuel consumption will remain depressed and copper prices falling to 3 week low. No economic data will be released today.

The Fed will purchase Treasuries today, part of the plan to lower borrowing costs and revive the economy. The Treasury will auction $40 billion in 2yr notes tomorrow, $37 billion of 5yr notes on Wednesday and $27 billion of 7yr notes on Thursday with the total $3 billion more than the last sale and the most since February.

Investors are focused on the upcoming Federal Open Market Committee (FOMC) meeting that begins tomorrow, looking for possible news on changes in Fed's view on the economy, to acknowledge the economy has improved since their last gathering and to reassure that interest rates will stay low for the near term. There is a risk that higher rates will hold back the budding economic recovery by lifting borrowing costs for homeowners and buyers. Volatility will continue in MBS markets as supply concerns weigh heavy on traders minds.