I thought for a few minutes about this week's headline.  Normally, I'd highlight the key events or considerations, but apart from Wednesday's FOMC Minutes, things are fairly diffuse this week.  It's not so much about whether one or two events will have an outsized impact on bond market momentum, but simply whether or not the good times will keep rolling in general.

And times are certainly good--especially when we consider the context of 2014 supposedly having been destined to result in higher rates.  While we're not even close to rates during the first half of 2013, we've been lower than the 2nd half for months. 

An argument could also be made that good times aren't rolling because most of the past 4 weeks has seen upward movement in rates, but I think this has more to do with the middle of October being somewhat of an aberration to the core trend of 2014 and the past 4 weeks being a return to that trend. 

Looked at in that light, the weakness didn't even push rates above the midpoint in that trend!  In fact, the last 2 weeks of more resilient trading occurred in such a way that 10yr yields bounced several times off that midpoint.  Take a look:

2014-11-16 Treasury

Looking at that chart, it's hard not to conclude that good times are rolling in 2014.  Or perhaps it's that bad times have been rolling in Europe.  While there have been plenty of justifications offered for the paradoxical rate environment, the only heavy hitter is the European influence (there was some more detailed discussion, including charts, on Thursday afternoon HERE).  With that in mind, this week not only brings the standard-issue economic calender in the US, but also several important pieces of economic data in Europe, including a speech from Mario Draghi on Friday.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
100-01 : +0-00
FNMA 3.5
103-13 : +0-00
FNMA 4.0
106-07 : +0-02
Treasuries
2 YR
0.5040 : -0.0119
10 YR
2.2990 : -0.0197
30 YR
3.0210 : -0.0221
Pricing as of 11/17/14 7:30AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Nov 17
8:30 NY Fed manufacturing * Nov 11.00 6.17
9:15 Industrial output mm (%) Oct 0.2 1.0
9:15 Capacity utilization mm (%) Oct 79.3 79.3
Tuesday, Nov 18
10:00 NAHB housing market indx * Nov 55 54
Wednesday, Nov 19
7:00 Mortgage Market Index w/e 372.9
8:30 Housing starts number mm (ml)* Oct 1.025 1.017
8:30 Building permits: number (ml)* Oct 1.040 1.031
Thursday, Nov 20
8:30 CPI mm, sa (%)* Oct -0.1 0.1
8:30 Initial Jobless Claims (k)* w/e 285 290
8:30 Continued jobless claims (ml)* w/e 2.370 2.392
10:00 Philly Fed Business Index * Nov 18.3 20.7
10:00 Existing home sales (ml)* Oct 5.16 5.17