Markets mostly shrugged off a much-better-than-expected Consumer Confidence number on Tuesday in favor of a much worse-than-expected Durable Goods report, at least at the beginning of the day.  Things exceedingly choppy within the scope of this week's narrow range following the scheduled Fed Twist buying and European close, ultimately leaving MBS and Treasuries very close to Monday's latest levels.  In short, it looked like Treasuries were somewhat determined to rally to recently stronger levels seen on 2/15, but were equally determined not to exceed those levels ahead of Today's more significant events.

One of the significant events is the ECB's second long-term refinancing operation, or LTRO.  Reuters has a thorough write up on the festivities:

(Reuters) - The European Central Bank is expected to pump half a trillion euros into the euro zone's troubled financial system for the second time in as many months Wednesday in what it hopes will be the last such operation to fight the euro zone crisis.  Banks can stock up on as much of the ultra-cheap, 3-year loans as they like at the second of the twin funding operations - a ploy the ECB unveiled late last year to dampen tensions on euro zone bond markets that threatened to tear the bloc apart.

Banks used much of the 489 billion euros ($656 billion) they borrowed at the first LTRO to cover maturing debt. Draghi has urged them to lend out the funds they tap at Wednesday's operation to households and businesses, helping strengthen economic growth.

"Once the liquidity is injected, what will count is if the periphery countries generate growth," said Andrew Bosomworth, senior portfolio manager at PIMCO. "Without growth, the LTROs are a bridge to nowhere."

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The LTRO seems to have been somewhat downplayed in terms of market-moving potential, and indeed that may turn out to be the case.  The important word is "potential" though...  even if one particular outcome isn't more likely than another.  It seems like getting a heads up on however many hundreds of billions of Euros are doled out at cheap 3-year rates is the sort of thing that market participants would find informative, and perhaps even requisite for near-term trading decisions.  Granted, we can surmise that the final tally will be somewhere within a certain distance from the €500 bln estimates, but who wants to bet on that before the fact? And who knows what the reaction will be to a big miss in either direction?  It's very much a "wait and see" affair.  (Incidentally, we'd bet on a higher uptake).

The other key event on tap for tomorrow is Bernanke's semi-annual report to Congress.  It's assumed that no policy changes will be unveiled, and indeed, many are downplaying the significance here.  But on the first sign of "a clue," (a clue!  a clue!), those same skeptics will make haste towards the nearest bandwagon, we're sure.  Bottom line, even though market participants won't be waiting with bated breath for new policy announcements, they'll certainly be tuned in for "clues," hints, and leanings.

At 8:30am, the first revision of Q4 GDP is surprisingly the dark horse of the day, but could easily shake things up earlier in the day along with the last major manufacturing report of the week, Chicago PMI at 9:45am.  Even if the morning data causes a stir, we wouldn't expect too much of a break from recent ranges until all the shoes have dropped, with the possible exception of the Beige Book (which will be part of the overall consideration if markets aren't moving directionally by 2pm, and likely completely overlooked if they are). 

Honorable Mentions:

• MBA Mortgage Apps at 7am
  
• Fed's Fisher (non voter) at 930am
• Scheduled Fed Buying, 2036-2042 Maturities at 1015am, concluding 1100am
• Fed's Plosser (non voter) at 1pm
• Annual report on "major foreign holders of US Treasuries" at 4pm.