After the initial sprint from the starting line with Monday morning's data, we've reached a sort of lull that may well carry through to tomorrow morning.  There is no more scheduled econ data left today and the most important events of the week are yet to come.  Tomorrow AM's data and perhaps even the 1pm auction of 2yr notes would have to miss their consensus by a significant amount to avoid muted responses ahead of Wednesday's FOMC announcment.  It's no surprise then, that we find ourselves hovering in a narrowing range, at or near important technical levels in both treasuries and MBS.

The 4.5 MBS is down 2 ticks to 100-27, well within a nominal range around the long term inflection point at 100-28.  Same story in treasuries as the 10yr is fighting off a rise above 3.62 yields.  But whether these markets move back and forth around these levels or maintain their technical aplomb doesn't matter much as long as they don't stray too far from the 3.62 pivot in treasuries and 100-28 in MBS.  And of course, we'll let you know if that happens.