Well, we HAD BEEN looking forward to getting back to a stronger level of connection between domestic economic data and market movements. But with the entirety of the EU debt crisis reemerging literally overnight (are we much surprised by this?), no such luck. Even so, we'll let you know what's on the agenda as it certainly can still move things around:

7am - MBA Applications
815am - ADP Employment
9am - Treasury Refunding Announcement
1230pm- FOMC Announcement
215pm - Bernanke Press Conference

How bittersweet is that?! An FOMC day AND a press conference day, and Greece/EU were "not to be outdone." Even so, Bernanke could have a trick or two up his sleeve, but they probably wouldn't be the kind that would directly benefit the bond market with one major exception. There's a small chance that MBS will be specifically mentioned again. This is probably the only way that a "surprise" in the statement works in our favor. Otherwise, stocks seem like they have plenty of reason to be selling already and 10yr yields are back under 2.0. So bond markets couldn't ask for much more in terms of trading at strong levels. For more details on tomorrow's data and events click :

10yr yields just put on quite a show, moving from 2.04 to 2.0 in the last half hour before official marks at 3pm, half of it in the last 5 minutes. The move is largely disconnected from the stock lever, indicating it was more to do with the 3pm close and flows in Treasury markets. MBS read the cue as clearance to launch. Fannie 3.5's are up almost half a point since the last alert, 23 ticks on the day at 102-17. This obliterates any price-based risks of reprices for the worse (leaving only pipeline control as a risk) and introduces the possibility that some lenders could now reprice for the better.

Not even 30 seconds ago, the S&P ticked to its highest levels of the day. 10yr yields are testing a supportive ceiling just over 2.04 and MBS don't seem all that pleased with the prospect of even a minor shift in underlying benchmarks. Fannie 3.5's have hit 102-03 on 4 distinct occasions in the past hour and if a lender wasn't already considering a strategic reprice for the worse to control inbound lock volume, they might now consider one with MBS operating near their lows of the day. It's not a "sure thing" that more than a handful of lenders might reprice, but a few might, and we're not seeing any cause for reprices for the better between now and lock cut-off. So if you were going to lock today anyway, now's a good time.

Have you ever tried speaking across a language barrier and received a hearty smile and nod of the head in response, but were still left wondering if what you actually said was understood? Does anyone else find Papandreou rife for this sort of parody? Step back for a moment and merely consider that here we have the country and it's Prime Minister who have been at the center of biggest "issue" for global markets since Lehman, who just hit a milestone of sorts with decisions coming out of the Summit, and not even a week later saying "wait a minute... we think we want to vote now, oh and while we're at it, I'd like the country to vote on me as a leader too... just because..."

It's no wonder that shortly after Merkozy's eyes return to level after an extended roll upwards that they're soon on the phone with Papandreou saying "whoa whoa whoa... hey now guy, this is how it's gonna be, OK?"

(Reuters) - Germany's Angela Merkel and France's Nicolas Sarkozy agreed in a phone call on Tuesday to talk with the Greek government, the IMF and their European partners on Wednesday in Cannes, ahead of a G20 summit, to push their view that a Greek referendum on a new bailout deal made it more necessary than ever to implement last week's EU summit decisions.

Merkel's spokesman Steffen Seibert said the German chancellor and French president "agreed, together with their European partners, to guarantee the full and swift implementation of the summit decisions, which are today more necessary than ever".

"Germany and France are convinced that this agreemenet will enable Greece to return to sustainable growth," Seibert said in a statement, adding that they had agreed to hold a round of consultations with European institutions and the International Monetary Fund, as well as a meeting with the Greek government, in Cannes on Wednesday.

11:59 - U.S. SUES ALLIED HOME MORTGAGE CORP, TWO EXECUTIVES OVER ALLEGED FRAUDULENT LENDING PRACTICES - COURT PAPERS

12:00 - U.S. CIVIL FRAUD LAWSUIT SEEKS TRIPLE DAMAGES, CIVIL PENALTIES UNDER FALSE CLAIMS ACT

12:00 - U.S. ACCUSES ALLIED OF ENGAGING IN RECKLESS MORTGAGE LENDING, FLOUTING REQUIREMENTS OF FHA MORTGAGE INSURANCE PROGRAM, AND REPEATEDLY LYING ABOUT ITS COMPLIANCE

12:01 - U.S. SAYS ALLIED BILLS ITSELF AS ONE OF LARGEST PRIVATELY-HELD U.S. MORTGAGE BROKERS

12:03: - U.S. SAYS NEARLY 32 PCT OF HUD-INSURED MORTGAGE LOANS MADE BY ALLIED FROM 2001 TO 2010 DEFAULTED, CAUSING HUD TO PAY MORE THAN $834 MLN INSURANCE CLAIMS