Mortgage backed securities (MBS) prices are lower (rates higher) in quiet sideways trading, typical for a Friday in June, as stock markets are higher and there are no economic reports due out today; FNMA 5.0% coupon 100.52bps, -9bps. MBS prices opened higher, reaching 100.67bps, only to fall back into negative territory, falling to an intra-day low of 100.34bps. Market participants are concerned over the looming supply of Treasuries ($104 billion), driving investors out of fixed income assets, like MBS, into more riskier investments seeking higher yields. Traders will begin to focus on the upcoming FOMC meeting June 23-24, with emphasis on the policy statement, hoping to gleen whether The Fed intends to raise interest rates soon because the recession is coming to an end. Coinciding with the FOMC meeting on June 23 will be the Treasury's auction of $40 billion in 2yr notes, $37 billion of 5yr debt and $27 billion of 7yr securities from June 23-25. The demand from foreign investors will be closely watched, as they are crucial for continuing the administration's record budget deficits. Gold prices have declined amid signs of recovery, after investors bought the metal to protect against plunging equities and a deepening recession, and are buying other assets such as real estate, reversing flight to quality trades. Crude oil prices rose for the third day on speculation that fuel consumption will climb as the global economic downturn subsides. Today is quadruple witching day and a Friday, so volatility is probable this afternoon.