Wednesday saw more all-time highs for MBS, but in this version, the winning streak gave a more convincing impression that the booster rockets provided by QE3 are running out of steam.  To go much higher, we'll need the main engines on line and that will take a concerted rally--or at the very least "ground-holding"--on the part of broader bond markets. 

This is more of a hunch than a guarantee--this notion that we might have our first down day in several weeks some time soon--and could be rendered completely inconsequential by one or a combination of events in the very busy day ahead.

There are several events in the European session that bear mentioning, chief among them being the Euro zone business climate report.  Supporting actors include German Import Prices and Unemployment, as well as UK's GDP reading.  The Looming "TBA" time slot reserved for headline risk goes to Spain today as we await details of austerity measures intended to preempt potentially sterner measures that would be required before Spain would be eligible for the ECB's recently announced "OMT" bond-buying program. 

Though a bit morbid for metaphor, this is akin to Spain being allowed to choose their own method of torture.  At least this way, there's an appearance of choice in the matter, and our guess is that the inevitable pain of austerity may seem slightly less painful if Spain brings it to the table instead of having it foisted upon them.

The domestic calendar gets a good share of the spotlight today as well. The last read on Q2 GDP is more of an "evening news" market mover and not as pressing for current trading (considering that Q2 ended almost an entire "Q" ago...).  But two other reports share the same 8:30am time-slot.  With us as always is weekly Jobless Claims, seen at 378k after last week's 382k, but the headline event is likely the Durable Goods report, expected to show a drop of 5 percent in Durable Goods orders vs a 4.1 percent gain previously.

Technically, there's also the Chicago Fed's Midwest Manufacturing Index, but with so much already going on at 8:30, this will fall by the wayside, and struggles to move the needle even on much lighter days of data.  The party doesn't stop there...  10am brings Pending Home Sales and 1pm, the conclusion of this week's Treasury coupon auctions in the form of 7yr Notes.  7's don't see much volume compared to 5's and 10's, but a funky result could register a response.  Even then, it's more about the auction cycle being over for the week and balancing that fact with whatever suggestions are made by the economic data, potential headlines, and month/quarter-end portfolio position adjustments.  Best shot of the week so far to see a truly busy day.