Overnight Sessions Growing Quieter Ahead of Summit. MBS Improve 8:27AM

Yesterday's open was preceded by an uneventful overnight session with low volume and the same is even more true for today's open. Volume dropped off to holiday-like levels and the price action was so abysmally sideways (basically a 1bp range in 10's between 2.035 and 2.045) that we can't quite scoff loud enough in commenting on it. 

We could mention headlines such as the EU Commission commenting on S&P's EU downgrade, Italian/Spanish CDS widening, Fitch commenting positively on Italian Austerity, Sarkozy speaking cryptically about time being of the essence in deciding on Euro Zone, or even the more recent "as expected" ECB rate cut, but the fact is that if 10yr futures volumes are under 100k heading into the NY open and overnight yields cut a 1bp range, that absolutely nothing of consequence happened. 

Markets are either doing a great job of fooling us or anyone and everyone is incessantly focused on Friday's EU Summit. That said, Draghi's press conference later today on the ECB cuts could be somewhat of an event and there's even some domestic economic data (finally)! 

0830am - Jobless Claims, expected at 395k (previous 402k)
1000am - Wholesale Inventories, expected +0.3 (prev. -0.1)
1000am - Wholesale Sales, expected +0.4 (prev +0.5)

Treasuries and MBS have been weakening since the NY open, currently up 3.5bps in 10yr yields to 2.068 and down 6 ticks from opening levels in 3.5 MBS at 102-13 (but still 4 ticks higher than yesterday's 102-09 going-out levels.