by Ben Bauer

Mortgage Bonds are giving back yesterday’s modest gains as the risk trade rolls on. Stocks rose in Europe and Asia and the rally is spilling over here in the States, which is putting pressure on the Bond markets.

Oil prices are rising for a fourth straight day on lower U.S. production – West Texas Intermediate is near $50.barrel after hitting $38 back in late August. Higher oil prices have been a bullish sign for Stocks as shares of Exxon Mobil and Chevron have pushed higher, spreading the good vibe across the broader markets.

Earnings season unofficially kicks off Thursday after the close of trading, with Alcoa being the first to report.

The 10-Year T Note yield has risen to 2.06% from Friday’s low of 1.90% and comes ahead of today’s $21B 10-Year auction – results at 1:00PM et. The rising yield is also putting downward pressure on Mortgage Bond prices.