To be fair to Monday, there wasn't much by way of 'drama' detectable in trading levels.  After some early gyrations, MBS were generally moving higher at the same gentle pace as the last session.  But drama looms nonetheless, and in two key forms.

The more innocuous form of drama is the glut of scheduled speeches from Fed members.  Yesterday saw some classics from Fisher, who managed to say that Janet Yellen was 'wrong' but that she'd make a great Fed Chair in the same sentence, among other things.  Markets took more guidance from Lockhart and Dudley, who both said it wasn't time to taper at the last meeting, in not so many words. 

The other dramatic presence is the 'government shutdown debate.'  Fiscal house-cleaning has been an ongoing saga unto itself for most of the financial crisis aftermath years, though the presence of unprecedented Fed policy changes and the European debt crisis makes it hard to assign weight to previous flare ups.  In other words, take the following chart with a grain of salt as it's not quite as simple as "government shutdown averted = big bond market rally."

We haven't reached any deadlines on the shutdown yet, so it would be terribly out of character for either side of the aisle to concede enough for meaningful progress this early in the game.  Much more relevant and interesting than political posturing will be today's data.  While Home Price Indices out at 9am are relevant to the Housing Industry, it's Consumer Confidence at 10am that stands as the most potent market mover.  Forecasts call for a slight decline to 79.9 from last month's 81.5.

The Treasury Auction cycle begins for the week with 2yr Notes at 1pm.  The results aren't a major consideration, but they're at least worth mentioning these days, and can have a slight impact felt across the yield curve.  If MBS find any more reason to improve today, they'll be challenging price levels not visited for several months.

MBS Live Econ Calendar:

Week Of Tue, Sep 23 2013 - Fri, Sep 27 2013

Time

Event

Period

Unit

Forecast

Prior

Mon, Sep 23

08:58

Markit Manufacturing PMI

Sep

--

54.0

53.1

Tue, Sep 24

09:00

FHFA Home Prices

Jul

%

--

0.7

09:00

Case Shiller Home Prices

Jul

%

2.0

2.2

09:00

CaseShiller 20 (Year over Year)

Jul

%

12.4

12.1

10:00

Consumer confidence

Sep

--

79.5

81.5

13:00

2-Yr Note Auction

--

bl

33.0

--

Wed, Sep 25

07:00

MBA Mortgage market index

w/e

--

--

428.2

07:00

MBA 30-yr mortgage rate

w/e

%

--

4.75

08:30

Durable goods

Aug

%

0.0

-7.4

10:00

New home sales-units mm

Aug

ml

0.423

0.394

13:00

5-yr Treasury Auction

--

bl

35.0

--

Thu, Sep 26

08:30

Initial Jobless Claims

w/e

k

325

309

08:30

GDP Final

Q2

%

2.6

2.5

10:00

Pending homes index

Aug

--

--

109.5

13:00

7-Yr Note Auction

--

bl

29.0

--

Fri, Sep 27

08:30

Consumption (Consumer Spending)

Aug

%

0.3

0.1

08:30

Personal income

Aug

%

0.4

0.1

09:55

Consumer Sentiment

Sep

--

78.0

76.8