The Day Ahead: Data Calendar Ramps Up; 10yr Treasury Auction, Fed Speakers

Tuesday was a challenging for MBS on several fronts.  In addition to being a relatively light volume "first day back after a 3-day weekend," MBS also had the settlement process to deal with.  It was all a bit much and prices reflected that, essentially moving sideways near Friday's lows by the end of the session as if to protest.

Treasuries did their own bit of protesting.  After spending the morning looking for guidance (and finding it in stock markets), the Treasury complex suddenly remembered that there's a 10yr Auction to accommodate today, and began backing up in yield without regard for stocks, which were generally sideways after the morning's initial bout of selling.

In addition to the 10yr Note Auction at 1pm, Wednesday also brings a smattering of mid-tier data including Wholesale Inventories and the Fed's Beige Book.  Potential central bank headline potential is well represented with a Fed/ECB conference on bank funding earlier in the day and is anchored by 3 additional Fed Speakers late in the session.