• MBS 4.5's up 1 tick to 100-08
• 10yr Tsy yield about 2bps lower at 3.82
• Dow's over 11k for 2nd day, S&P still can't crack 1200, no one cares either way
• How many instances of Fed Speak can you count over the next few days?
• 13!   (15 if you count the remainder of the day!)

Few weekly econ calendars will have as many slots devoted to Fed speakers as we have from now until the rest of the week.  Heck, some MONTHS won't have this much.  What does it mean for rates?

Perhaps the most significant effect the Fed can have on markets is to inform and change the SHORT END OF THE YIELD CURVE.  Simply enough, the more that the Fed speakers do to keep short end yields lower, the more the longer duration yields can drop without affecting the shape of the yield curve (or at the very least, keeping the shape of the yield curve within recent norms).

And if longer duration yields are dropping, it's generally good for mortgage rates, even though mortgages tend not to improve quite as fast as treasuries into a rally. READ WHY

Despite a few instances of volatility above, we see 10yr yields gradually "coasting" into a roughly 3.82 level ahead of tomorrow's CPI data and Bernanke-led Fed speaker revue.  In addition, there's the not-to-be-overlooked Retail Sales, and Business Inventories. 

Excluding autos, retail sales is expected down from .8% to .5%.  The consensus for CPI is a tame .1% core increase--same as last month.  An "as expected" retail sales number and dovish reading on CPI could combine well with the hundred bagillion instances of Fed speak to soothe bond markets into testing lower yields still.  But stronger sales or steeper inflationary pressures in CPI could have the markets rethinking their recent trend lower in yield.  Either way, Bernanke at 10am is a good candidate for the day's headliner.