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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It's just another day in the end-of-year grind for bond markets.  Yields have maintained a stupidly narrow range ever since the mid-month FOMC announcement and volume has progressively dwindled to levels that make intraday movement all but inconsequential.

Watching bond markets right now is akin to being a security guard at a venue where nothing interesting has happened for weeks.  You start to get sleepy after a while.  Recent history suggests it's most likely safe to take a nap, but you're still the security guard, and there's no guarantee something won't go down as soon as you close your eyes.

As for today's security risks (get it? Bonds are securities...), there aren't many overt threats.  The morning's only economic data worth mentioning is Pending Home Sales at 10am--not normally a market mover.  The 5yr Treasury auction at 1pm could be more relevant, as "working through new supply" is one of this week's key challenges for bond traders.