For third time in 4 days we've seen some compelling support come into play in MBS and Treasuries.  Not all of the support has come in at the same levels, but the post-NFP theme has been consistent in that 10yr yields have started to feel more of the effects of gravity as they move over 2.05.  This has translated to MBS generally well this week as spreads have come in a bit from Friday's levels (meaning MBS are keeping pace with or slightly outperforming Treasuries. 

The last two instances of supportive relief are clearly evident following the 10 and 30yr Treasury auctions this week.  The following chart runs the risk of minimizing the importance of Wednesday's ceiling but consider that we were up against weaker overnight trading this morning and a much stronger Jobless Claims report (and on NFP "Survey Week" to boot).  Moreover, consider where 10's went after finding these ceilings:

In short, 10's went right back to the same old resistance trendline.  This is a Pyrrhic Victory for bond markets as it reinforces the validity of overhead ceilings in 10's at the expense of facing equally tough resistance.  In general, stuff like this tends to happen when the market is range-bound or consolidating--especially ahead of a watershed event like next week's FOMC Announcement.  Barring surprises, this is very likely what's happening.  Zooming out to a wider time scale offers a bit more context and a bit more room to run.

Friday then, is just another "at-bat" for a rag-tag group of economic reports, none of which are too likely to move the needle outside the above ranges.  If there's confluence in theme among the manufacturing data (NY Fed at 8:30 and Fed's Industrial Production report at 9:15) and Consumer Sentiment at 9:55am, it could be enough to start an early "lead-off" ahead of next week's data.  Wild cards include the onset of Italian political discussions that may be starting next week and of course any unexpected headline shockers.