MBS Day Ahead: Nothing Happening

There's been such an appallingly small amount of trading activity this week that it doesn't make much sense to discuss or consider market movements until it comes back online.  We're almost certainly waiting until next week for that and possible for the week after.
Keep in mind that Nonfarm Payrolls will be on January 10th as opposed to the first Friday of the month on January 3rd.  That's almost like an endorsement for market participants to not even try getting back in the swing of things until the second week in January.

Apart from that, it's good to remember that financial markets aren't just flashing numbers and lights on computers screens.  The cogs are turned by real people whose holiday agendas (and levels of desire to be putting much thought and effort into work) are broadly similar to the rest of society this week.  

Of course they're not all simply out of the office, but indeed many of them are.  Those who remain are running in 'safe mode' and volume figures reflect the apathy.  Check out the chart below with 10yr yields and futures volumes for a glimpse at how much things have dropped off.

There is no significant economic data on the calendar.