MBS Live Day Ahead: The Theme is "Waiting"

After having waited a day to begin trading this week due to yesterday's Columbus Day holiday, bond markets will spend today waiting for the week's more relevant data and events.  Those will begin in earnest tomorrow with two Treasury auctions (3 and 10yr) and the Fed Minutes (more detailed recap of most recent meeting).  Thursday brings the end of the week's Treasury auction cycle and Friday brings the week's biggest economic reports with the Consumer Price Index and Retail Sales.

Throughout those four days, we'll hear from various Fed speakers, but the lineup doesn't suggest any major bombshell potential.  Specifically, Kashkari, Kaplan and Evans haven't changed their tack recently, and they account for half of this week's speaking engagements.  Moreover, there are no scheduled appearances for the big 3 (Yellen, Fischer, or Dudley).  

Bonds are starting out the week in much the same way they ended last week: holding inside just slightly weaker territory versus Thursday afternoon--same story for stocks:

In terms of technicals and momentum, we continue to watch the MACD forest for a return toward the zero line.  Normally, this technical indicator is "positive" if the bars are merely descending, but we recently had a "false positive" (bars started to descend, then bounced higher), thus forcing us to raise the bar for a rally signal.  The fast and slow stochastics tend to agree as both are holding equivocally near 'oversold' territory.  In simple terms, bonds are sideways near their weakest recent levels.  They have a chance to improve, but they have yet to give a clear indication of their intent to do so.