Despite a fair amount of focus on last night's State of The Union speech in the news, it was a complete dud in terms of bond market movement.  These speeches are usually duds, but this time around, bonds were on high alert for any threats, having made 2 successive 3yr+ intraday highs.  The thinking was that a more robust announcement of the infrastructure spending plan alluded to last week, last month, and last year would put pressure on bond markets because of its implications for Treasury supply.  There are several articles covering the infrastructure plan as it related to last night's speech.  Here's one.

A more important supply consideration arrives this morning in the form of the Treasury's quarterly refunding announcement.  Markets expect 3/10/30yr auctions to come in at $25/24/16 billion respectively.  If those numbers are higher--especially if the longer-term auctions are higher--it could put pressure on bonds and MBS.

The afternoon brings the FOMC Announcement.  There's not much the Fed can do to surprise markets today.  We can be almost certain they won't come out with a surprise rate hike.  This isn't a meeting with "economic projections," thus the Fed can't surprise markets with a shift in the rate hike outlook either.  That really just leaves the verbiage choices in the announcement as the only venue for potential surprises, and that's not much to work with.  Still, if the Fed is extra aggressive in its tone, bond markets could take it personally.