Friday marked the only decidedly positive day for bond markets last week with MBS gaining three eighths of a point and 10yr Treasuries down to 1.76.  After the 4 days of losses, it's hard to tell if Friday will stand out as one of those pauses for consolidation before continuing to weaken or if it could actually be an ongoing bounce to better territory.

Today may not be much help in making that determination as the first two days of the current week contain precious little data and events.  Monday is almost stone silent with only some scheduled Fed Twist buying and Fed-speak from Pianalto at 1:30pm.  The week's Treasury auction cycle technically begins on Tuesday, but considering that it's a 2yr Auction, it will not be a market mover for MBS.

The auctions, and more importantly, the events, get a bit more interesting later in the week as the Fed takes the stage for the first FOMC Announcement since QE3 debuted in mid September.  We doubt anyone expects any changes in policy, but we're intrigued by this statement as it's the first official chance for reflection on QE3.  As such, it offers the first opportunity to gather clues that will later help markets concoct labyrinthine sequences of "ifs and thens" regarding the continuation and eventual discontinuation of QE3. 

The FOMC release is joined by the week's first somewhat noteworthy economic data with FHFA Home Prices and New Home Sales.  Wednesday's 5yr Treasury Auction is also the first of the week that merits some small amount of attention.  The increased level of data and significance of auctions continues into Thursday with Durable Goods, Jobless Claims, Pending Home Sales and the 7yr Note Auction.  Friday has just the initial GDP reading for Q3 and Consumer Sentiment later in the morning.