NOTE: This paragraph will be at the top of the Day Ahead for a few weeks.  Once you've read it, feel free to skip it.  The Day Ahead has long been my venue to offer deep thoughts with a mix of big-picture and near-term technical considerations.  I'll still be doing that, but in posts on MBS Live and under the 'General Commentary' heading (which still shows up on MND for free, but delayed).  The Day Ahead will quickly evolve into a more cut and dried run-down of the events of the day (as it should be).  Some days are more interesting than others, so some posts will be almost comically short, depending on the slate of events.  It will still contain charts from time to time, but generally just to lay out technical levels we should be watching.  

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There is no major economic data on tap this week until Thursday.  Of the significant reports, the only reliable market movers hit Friday with Retail Sales, Producer Prices, and Consumer Sentiment (arguably only an occasional market mover).

It's also the last week before Trump's inauguration, so there could be a trading response to political developments as Trumps cabinet picks are vetted, grilled, and confirmed by congress.

The absence of economic data early in the week leaves the focus not only on politics, but also on the technical landscape in bond markets.  Technicals have recently been very relevant, with many of last week's buying and selling cues ostensibly driven by major pivot points.  

As of Friday, 10yr yields were in the process of rejecting (i.e. "bouncing higher off of") the 2.34 pivot and testing (i.e "moving up to, but hoping not to break") the 2.42 pivot.  As we begin the new week, 2.42% has held as a ceiling for now.  As such, we can continue to watch it as the most relevant overhead support/ceiling.  A break of 2.34% would ramp up the positive tone.  A break of 2.42% would reintroduce more caution and uncertainty.

The week ends with a 3-day weekend with markets closed on Monday in observance of Martin Luther King Jr. Day.