The sense that financial markets are circling the wagons in preparation for tomorrow's FOMC events is palpable.  Yesterday ended up being the lightest day of the year in terms of Treasury trading volume.  MBS traded below average as well.  While both saw modest gains, neither broke any recent ranges.  Charts still give the clear sense that trading ranges are consolidating ahead of FOMC.

And all that despite bigger moves in other markets!  In other words, Treasuries and MBS are grinding to a halt (albeit a refreshingly resilient halt) of their own volition.  That means one of two things usually.  Either they're legitimately indecisive, or legitimately waiting to be decisive until after FOMC events bring clarity tomorrow.

One thing's for sure: today's only major economic data isn't the sort of thing that can deliver that kind of clarity.  To be sure, housing is 'interesting' in that it's closely related to our focus on rates and MBS, but it's not exactly where the Fed is looking on their short list of market bellweathers.  Let's face it.  It would be fairly depressing if that was the market bellweather considering how Today's Housing Starts figures will inevitably look in the long run.

Long story short, bonds are passing the time today.  There is always a chance that momentum picks up ahead of a key event like the Fed, but short of something truly special in terms of beat or miss in the data, or a truly special headline out of left field, those chances are subdued.