The pace of data and events slows down appreciably today as the Treasury Auction cycle, MBS settlement, and most of the week's economic data is behind us.  That said, there are a few reports this morning and markets naturally remain susceptible to each and every European headline concerning Greece and Spain.

To that end, we have the expected announcement by Spain on measures to clean up its banking sector.  Details are already coming out on this and the market reaction so far would seem to suggest a relative lack of importance.  But we'll be the first to admit that it's hard to know if we're in fact receiving the expected information when we see a newswires such as :

RTRS - SPAIN GOVT TO INJECT PUBLIC FUNDS IN BANKS THAT CAN'T MEET NEW PROVISIONING REQUIREMENTS - EL PAIS
RTRS - SPAIN GOVT DEMANDS BANKS TO INCREASE PROVISIONING TO UP TO 47 PCT ON HEALTHY REAL ESTATE LOANS - EL PAIS
RTRS - SPAIN'S GOVT TO DEMAND BANKS SEPARATE REAL ESTATE ASSETS BEFORE END OF YEAR - EL PAIS
RTRS - SPAIN DEPUTY PM SAYS GOVERNMENT APPROVES BANKING REFORM
RTRS - SPAIN DEPUTY PM SAYS ORDERS INDEPENDENT AUDIT OF ENTIRE REAL ESTATE PORTFOLIO OF BANKS 

We think this is the news that we were waiting for, and as such are a bit disappointed that it seems to be having little effect despite being billed as a bigger-ticket event for today.  So we'll go back to doing what we normally do: huddling in the corner, shaking with fear and anticipation of any other Euro-zone tape bombs.  

The domestic data front isn't too terribly exciting, but there are two reports out this morning.  The 8:30 slot goes to Producer Prices, expected to be unchanged month-over-month but slightly hotter at the core level, +0.2 pct.  Consumer Sentiment is seen almost unchanged at 76.2 vs 76.4 last time.