MBS Week Ahead: Geopolitical Risk Squares off with Busier Week of Economic Data

Last week's calendar of events were little match for the headlines coming out regarding the situation in Ukraine.  Markets were in full "herd mode," simply trying to react to the news and to each others' reactions. 

The current week begins with the referendum in Crimea showing a majority of voters wanting to join Russia and Russian Parliament saying there would be legislation to this effect in the near future.  It's as yet unclear whether the drama simply fizzles out now or if there's more to come.

While that's being determined, financial markets will start digesting a more robust slate of economic data right off the bat.  Additionally, we have an FOMC Announcement on Wednesday with Yellen's first "Chair Press Conference."  With the exception of Friday, there are at least a few notable economic events every day  this week.  Thursday is the busiest day  with the most meaningful data (other than FOMC Wednesday, but that's not technically economic data).

If the data is decent or better, or if geopolitical tensions don't spike again, bond markets are facing the prospect of confirming yet another medium-term bounce.  Incidentally, the last such bounce came after rallying sharply on Ukraine fears, and holding sideways in much the same way as we've just done.