On some occasions, we look ahead to big-ticket events like central bank announcements and NFP reports with more anticipation and anxiety than they deserve.  That's understandable because these events historically pack the biggest punch when it comes to market movement potential.  Other times, it's been safe enough to be fairly dismissive of the market movement potential.  This week may be in another category altogether.

The three days coming up at the end of this week are all but guaranteed to cause a significant move in bond markets.  This will begin with the ECB announcement and ADP on Wednesday and end with NFP on Friday.  Granted, there is always some small chance that the motivations from the events leaves us in some sort of weird, volatile equilibrium, but it's more likely that we'll be on the move. 

Then there's today.  Where does it fit in with all the heady stuff that transpires on the last three days of the week?  Simply put, it doesn't.  It's an opening act for a show so big that people are more concerned with making sure they won't need to revisit the restroom once the main act takes the stage.  The only scheduled data that could even be considered lower-second-tier would be Factory Orders at 10am.  If we see any significant movement, it's far more likely to be the result of corporate debt-related tradeflows or unexpected European headlines. 

In such an environment, all we can do is watch the range.  To that end, we have 2.13 as resistance as far as 10yr yields are concerned.  The analogous ceiling for Fannie 3.0s would be 101-06.  The scary part is how far away the supportive levels are (2.28 for 10's and 100-09 for Fannie 3.0s).  In other words, we could lose a lot of ground without even threatening a breakout of the range.  And just as Friday's rally showed, a range break doesn't guarantee confirmation and follow-through.  Markets aren't showing a clear bias in terms of tradeflows and technicals here.  We're at the whim of data and events.