Amid last week's glut of Fed speeches surrounding the Jackson Hole symposium, Fed Vice Chair Fischer specifically called out "the next two weeks of data" as having a bearing on the Fed's potential September rate hike.  Incidentally, the first of those two weeks contains some of the most traditionally important data, including both ISM reports, ADP Employment, and the big daddy: NFP on Friday.  Whether or not these reports ultimately sway the Fed's decision remains to be seen, but after Fischer's comments, markets are more on-guard for that than they otherwise might be.

Somewhat conveniently, the week begins with one of the less consequential reports in the form of Chicago PMI.  Note that "less consequential" is only a term that applies to this report on a relative basis, due to the high profile company it keeps during the rest of the week.  Also keep in mind (for those of you with MBS Live, or who otherwise have access to real-time bond/MBS prices), that some traders receive Chicago PMI at 9:42am as opposed to the 9:45am published release time.  That's more of a curiosity than anything, but good to know nonetheless if you happen to see a more volatile move at 9:42 (usually a clue as to how the report will come out).

In terms of charts and trading levels, this approach to the Fed decision is taking place on a playing field with an increasingly clear 50 yard line--at least in terms of its effects on longer term yields. During last October's extra volatile move to long term low yields, 10yr Treasuries ended up charging back higher to end the week near 2.20.  Last week saw an almost identical mega-rally to long-term lows, and an almost identical mega-correction.  The result: something near 2.20 again (officially 2.199 in Oct and 2.19 last week).  Not only that, but yields zoomed up to 2.19 by mid-morning and bounced repeatedly, as if to reinforce the technical significance of the level.  Looking back at recent chart, we can see numerous examples of weekly trading ranges starting and stopping near 2.20.

Of course, longer term yields have more to think about than just the Fed, as we can see based on the varying performance in 2yr and 10yr Treasuries over the past week/month/year.  Even so, the Fed's decision will be the biggest input for the entire bond market.  While a hike might not have the same upward pressure on 10's as it would on 2's, it would still be a big deal.