A general uptick in "risk-on" trading prevailed overnight.  Volume remains somewhat subdued versus the healthier days from the end of last week, but is slightly better than yesterday with Japan back to work. It would be nice if there were some clearcut headline money movers in the overnight session, but alas, the broader risk-on vs risk-off ebbs and flows of European markets continue to dominate US pre-market trading.

In today's version, we find Euro stocks up, bonds down (specifically the long end), with some traders citing Fitch's decision to "not downgrade France yet" as a positive for risk sentiment.  Combine this with a decent Greek short term debt auction and perhaps some inclination toward a technical bounce in US 10's coinciding with the desire to get set up for tomorrow's auction and there's plenty of boring, inconsequential goings-on to justify a pull-back to nearly 2%.  MBS are down 3 ticks at 103-02, but make sure to shave about another 10 ticks off that in the back of your mind for tonight's roll (Class A = Fannie/Freddie 30yr Fixed MBS) 

Despite the quieter volume overall, things are picking up fairly well this morning at the start of the NY session, though the first major release doesn't hit until 10am with Wholesale Inventories (not so "major" in the big picture, but as far as this morning's economic data is concerned anyway). The more significant event, at least from a historical standpoint would be the 3yr Note auction at 1pm, but these have been less and less of a market-mover since the August FOMC announcement unveiled the "2013 verbiage." Nevertheless, a big deviation from historical averages could still be a mover. 

There are a few fed speakers on the docket, and with the generally increasing feeling in the air that QE3 is up for debate, we may or may not be interested in what they have to say. Of the three today, 2 are voters (Pianalto and Williams) and one not voter (KC's George).