MBS Live Week Ahead: Slow Data Week Apart From Housing; Bonds Hoping to Confirm

From a calendar standpoint, the most notable thing about the week ahead is that it's the final week of the month/quarter.  This usually means we'll see at least some trading happening for reasons that have nothing to do with data, events and headlines (read more about "month-end" trading).  Thursday and Friday have the biggest potential for volatility in that regard.

There will actually be plenty of economic data to digest.  It's just that most of it has to do with the housing market, and typically doesn't pack the same sort of punch as the reports that moved markets last week.  Incidentally, the exceptions also show up on Thursday and Friday (GDP, PCE inflation, Consumer Sentiment).

From a technical standpoint, bonds are in the process of deciding if they have any right to continue trading in recently acquired territory.  At the very least, the overnight session suggests yields are far from panicked about where they ended up on Friday.  The nearest overhead ceiling for 10yr Treasuries is at 2.47%.  Holding there or below would be tremendous validation for last week's move.  We could continue to entertain bigger picture strength even if one of the other two ceilings holds from the chart below (2.55 or 2.62).