Whereas Monday required some level of qualification and explanation to be considered an extremely flat session, Tuesday asked for no such consideration.  After an average amount of overnight volatility (especially considering that it was Europe's first day back in the office after 4 days off), domestic bond markets walked in the door well inside their trading range from the previous session and didn't move much at all.  This was especially true for MBS, where Fannie 3.0s held a 3/32nds range for the entire session.  With each passing day, chances grow that we'll see a break away from the narrow range that's contained everything since Thursday:

There's more at stake for MBS in the near term, however.  The chart above contains only a small portion of the longer term range and it's upper limits at 103-10 have been a historically significant pivot point on the way to historic highs.  Of course, MBS aren't automatically headed to all time highs again if we simply trade above 103-10, but any sort of positive momentum through this week makes 104-00 look downright obtainable.  If the momentum builds in a less-than-positive fashion for MBS, we could only hope to see support at 102-18 (not pictured below) or failing that, somewhere just over 102.

Today then, will be the first major opportunity to get that momentum kicked off.  As is frequently the case, we'd point out that "opportunity" doesn't guarantee results.  This morning's data has all the POTENTIAL in the world to cause a big lead-off ahead of Friday's NFP, but such instances are the exception rather than the rule.  The data in question is March Private Payrolls from ADP, a controversial proxy for Friday's private payroll number.  Here's how the two line up over time though...  You can see why the data can cause some adjustments to NFP projections.  If ADP isn't causing much fuss at the open, ISM Non-Manufacturing data follows at 10am, and is expected to fall right in line with the previous reading of 56.9.  

MBS Live Econ Calendar:

Week Of Mon, Apr 1 2013 - Fri, Apr 5 2013

Time

Event

Period

Unit

Forecast

Prior

Mon, Apr 1

08:58

Markit Manufacturing PMI

Mar

--

--

54.9

10:00

ISM Manufacturing PMI

Mar

--

54.2

54.2

10:00

Construction spending

Feb

%

1.0

-2.1

Tue, Apr 2

09:45

ISM-New York index

Mar

--

--

572.7

10:00

Factory orders mm

Feb

%

2.9

-2.0

Wed, Apr 3

07:00

Mortgage market index

w/e

--

--

823.7

08:15

ADP National Employment

Mar

k

200

198

10:00

ISM N-Mfg Bus Act

Mar

--

56.8

56.9

10:00

ISM N-Mfg PMI

Mar

--

55.8

56.0

Thu, Apr 4

07:30

Challenger layoffs

Mar

k

--

55.356

08:30

Initial Claims

w/e

k

347

357

Fri, Apr 5

08:30

Non-farm payrolls

Mar

k

200

236

08:30

Private Payrolls

Mar

k

209

246

08:30

Unemployment rate mm

Mar

%

7.7

7.7

08:30

International trade mm $

Feb

bl

-44.6

-44.5

15:00

Consumer credit

Feb

bl

16.00

16.15

* mm: monthly | yy: annual | qq: quarterly | "w/e" in "period" column indicates a weekly report

* Q1: First Quarter | Adv: Advance Release | Pre: Preliminary Release | Fin: Final Release

* (n)SA: (non) Seasonally Adjusted

* PMI: "Purchasing Managers Index"