This one's a bit of a stretch, largely because the news that's ostensibly moving markets isn't really news at all and also because, well.... it's about Hungary.

No offense to Hungary in the slightest, but if we had any other news today, this wouldn't be having much of an effect on markets. Furthermore, it's not much of a shock coming from a country most recently in the news for wanting to make it's central bank independent.

Today's news is that the IMF has basically said that it won't continue to engage in negotiations to provide funding for Hungry unless the latter "demonstrates its willingness to engage on policy issues that are relevant to macroeconomic stability."

In other words, "Dear Hungary, play ball or no extra funding for you."

Although it's questionable as to whether or not Hungary actually needs IMF funding for any pressing reasons, on a day with volume as low as it is, this has been enough to drag the risk-on sentiment down, starting in Europe, but also being felt in lower domestic equities and bullish bond markets. Again, the amount of movement in domestic markets doesn't correlate to the news and is merely magnified by what is still exceedingly low volume.

One day in to the post Christmas/Pre-New-Year holiday week and it's shaping up to be the slowest in years. Not only is that slowness seen in terms of market volumes, but also in positional apathy. In other words, there doesn't seem to be much intent to take advantage of this low volume to move markets in one direction or another.

Case in point, 10 yr Treasuries traded in a range of about 1 basis point overnight and begin the domestic session just edging down another bp to the high 1.98's. Fannie 3.5 MBS are up 4 ticks at 102-07. One would think that the only major news overnight--a much stronger than previous Italian debt auction (short termer - 3.25% vs 6.5%) would be benefiting the "risk-on" trade and hurting domestic bond markets, but in a testament to the lack of volume and abundance of apathy, there was little discernible market-based reaction.

As far as economic data into the rest of day, there is none. While the Redbook report is released at 8:55am, this is not something we pay attention to and not something that moves markets, let alone MBS. This being the case, we're basically resolved to watching and waiting for something of sufficient significance to cross the wires that we're forced to respond--like a sleeping security guard, feet on the desk, arms behind our head, not likely to wake up unless roused by alarms or some equally loud noise.

We would continue to advocate not reading too much into trading levels unless otherwise noted. With Chicago PMI and Jobless Claims, tomorrow may be our last chance to see some small signs of life, but even those amount to large trees falling the woods, there's still no one around to hear them.