In terms of the technical trends as of last week, domestic bond markets became more balanced by the end of the week.  Before that, they were certainly at more risk of weakness after bouncing at long-term low yields on Tuesday.  Friday's strength kept many of the mainstream technical studies OUT of the territory that would suggest a bigger bounce into weaker territory was underway. 

For instance, in the chart below, negative risks would be more imminent if the bottom 3 sections (Fast Stochastics, MACD, and RSI, respectively) were moving higher.  But so far, they've been holding steady.  While that's no guarantee for future performance, it's one vote in favor of balance as we begin the new week.

2015-1-11 tsy techs

Data arrives at a moderate pace, but most of it arrives in the 2nd half of the week.  Treasury auctions begin on Monday.  If there's a focal point of the week, it's Wednesday, and not just because it hosts what is probably the week's most significant domestic economic report (Retail Sales).  The dark horse market mover is the preliminary assessment by the European Court of Justice in Strasbourg on the ECB's OMT bond buying plan.

Last February, Germany's highest court raised a legal challenge to the OMT plan, suggesting it violated the Eurozone treaty's ban on so-called "state aid."  The reason it's not cut and dry is that there are numerous provisions that outline exceptions to that ban in the treaty.  Most of Europe thinks it's just fine, and Germany (which essentially runs the Eurozone--no joke) doesn't.

Why is all this important?  Because if the Strasbourg court doesn't think OMT is a violation, it would be a big vote of confidence in the ECB moving on to the next level of aggression with quantitative easing.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
102-14 : +0-00
FNMA 3.5
105-05 : -0-01
FNMA 4.0
107-03 : +0-00
2 YR
0.5690 : +0.0040
10 YR
1.9780 : +0.0279
30 YR
2.5660 : +0.0344
Pricing as of 1/12/15 7:34AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Jan 12
13:00 3-Yr Note Auction (bl)* 24
Tuesday, Jan 13
13:00 10-yr Note Auction (bl)*
Wednesday, Jan 14
7:00 Mortgage Market Index w/e 329.9
8:30 Import prices mm (%)* Dec -2.9 -1.5
8:30 Retail sales mm (%)* Dec -0.1 0.7
8:30 Export prices mm (%)* Dec -1.0 -1.0
10:00 Business inventories mm (% ) Nov 0.2 0.2
13:00 30-Yr Bond Auction (bl)*
Thursday, Jan 15
8:30 NY Fed manufacturing * Jan 5.00 -3.58
8:30 Initial Jobless Claims (k)* w/e 291 294
8:30 Jobless claims 4-wk avg (k)* w/e 290.50
10:00 Philly Fed Business Index * Jan 19.9 24.5
Friday, Jan 16
8:30 CPI mm, sa (%)* Dec -0.4 -0.3
9:15 Industrial output mm (%) Dec 0.0 1.3
9:15 Capacity utilization mm (%) Dec 80.0 80.1