Markets only had one day to digest the landmark QE3 announcement last week which saw the Fed roll out open-ended large scale purchases of newly originated MBS to the tune of $40 bln / month (on top of the roughly $40 bln / month already being bought with the cash flow from the Fed's existing MBS portfolio).  Naturally, there was some volatility on Friday.  Treasuries sold off to their worst levels since early May while MBS themselves generally held at least 10 ticks higher than their pre-QE3 Announcement levels at their very worst (despite a big sell-off on Friday after hitting new all time highs in the morning).  Whew!  Busy couple days...

This week then, provides a great opportunity for markets to "trade it out."  There's not much on the calendar in terms of economic data and there's a deluge of Fed-speak throughout the week.  The only wild card is the ongoing potential of European headlines as Spain remains under pressure from Euro zone finance ministers to request a bailout after borrowing a record amount from the ECB in August.

Even with the ample supply of Fed speakers to help markets continually refine their understanding of QE3's nuts and bolts, Monday is the "gimme" of the week with no major data apart from September's Empire State Manufacturing Survey (which isn't really "major" unless it boasts big surprises) and no Fed speakers.  Even the European calendar is relatively silent.  All of the above should make for a good opportunity for markets to express themselves, as unencumbered as possible by non-QE3-related trading considerations.