Treasuries started unchanged this morning, but mortgage prices were slightly weaker at 9:00. At 9:00 the 10 yr unch at 3.66%, mortgage prices -2/32, the DJIA futures -3. At 9:30 the DJIA opened -35, the 10 yr -6/32 and mortgage prices -5/32. (see below for 10:10 levels)

Early today, after the strong stock market rally yesterday and selling in the interest rate markets, markets were generally flat as markets paused to think about it. The only economic release today hit at 9:55 with the U. of Michigan consumer sentiment index. The index was expected unchanged at 64.6, it hit at 66.0, at the end of June the index was 70.8; the current conditions index at 70.5 down from 73.2 at the end of June and the 12 month expectations index at 63.2 down from 69.2 at the end of June. On the release the equity markets dipped and rate markets found a little traction.

Today both Bernanke and Geithner will be testifying on financial reforms and regs. Congress is bent on tightening rules to regulate financial markets after the collapse in 2007. Bernanke wants to have control over consumer protection but so far Congress is moving toward a super regulator that will oversee consumer protection as well as overall regs on banks, non-banks, derivatives and mortgage markets. Lock the door after the burglars have left the building totally empty. FDIC chair Sheila Bair is saying this morning that off balance sheet assets or liabilities at banks should be considered the same as on balance sheet assets and liabilities; quite a statement and a move that should be implemented.