Bond markets are off to a decent start with 10yr yields down just over a bp at 2.044 and Fannie 3.5 MBS up 4 ticks at 102-24. The overnight session was rather uneventful although volume was fairly strong considering China remains out for the New year holiday. An interesting thing happened with respect to that which is normally so important to overnight sessions: European Headlines. In this case, we have Euro-zone finance ministers rejecting an offer by Greece's private bond holders--something that seems like it would be more bond-market-bullish. Yet that apparent setback caused little by way of volume spikes or outright rallying, perhaps reinforcing the fact that the market is quite focused on tomorrow's FOMC announcement.

As far as the morning hours are concerned, today is another relatively empty morning. Unlike yesterday, however, there are a few economic reports: weekly store sales, Redbook (department store sales), and Richmond Fed Manufacturing Index, but none of these reports are potent enough market movers or sufficiently related to housing/mortgage markets to make it on our weekly calendar.

With that assertion in mind, it's questionable to even pay much attention to the 2yr Note Auctions since the August FOMC meeting where the "2013 verbiage" was first introduced. That FOMC announcement is widely regarded as having glued-down the short end of the yield curve and auction results offer no argument there. The relative absence of volatility in shorter maturities has rendered the 2 yr auctions mostly innocuous. That will probably be the case again today, although we might hold out the possibility for some sort of reaction given the speculation that tomorrow's FOMC announcement may contain an alteration to the "2013 verbiage."