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What is on the agenda for this week?

Date	Time (ET)	Economic Release	Actual	Market Expects	Prior
30-Dec	10:00	Pending Home Sales		1.50%	-0.60%
31-Dec	9:00	Case-Shiller 20-city Index		13.80%	13.30%
31-Dec	9:45	Chicago PMI		60	63
31-Dec	10:00	Consumer Confidence		77.1	70.4
2-Jan	8:30	Initial Claims		333K	338K
2-Jan	8:30	Continuing Claims		2875K	2923K
2-Jan	10:00	Construction Spending		0.80%	0.80%
2-Jan	10:00	ISM Index		56.9	57.3
2-Jan	10:30	Natural Gas Inventories		NA	177 bcf
3-Jan	11:00	Crude Inventories		NA	-4.731M
3-Jan	14:00	Auto Sales		NA	5.7M
3-Jan	14:00	Truck Sales		NA	7.1M

We have another holiday-shortened week.  The bond market will close at 2:00EST on Tuesday and will not reopen until Thursday.

Tuesday's Chicago PMI report will be very key as it give us a general idea on how Thursday's ISM Manufacturing Index may turn out.  A strong reading in both of those reports would be negative for pricing.  And with the much better than expected Durable Goods Orders, Business Inventories and Wholesale Inventories over the past couple of weeks, we can infer that the manufacturing data this week will be strong.

We will get a nice dose of housing data with Pending Home Sales and the Case-Shiller Home Price Index.  The market is expecting an increase in new contracts for existing homes and continued increases in home values. Consumer Confidence will also be very key as will our weekly shot of Initial Jobless Claims.

There are no major U.S. Treasury auctions this week.

MBS are making a run back to our 10 day moving average which should help you to see some better pricing in early trading. But as we have discussed, that 10 day resistance line has held for the entire month of December. So, from a technical perspective our "upside" is limited and that is why we are not in a "floating" bias at this time.  Even if we begin to trade above that resistance level, we do not expected to close above it unless we get a dismal Pending Home Sales report.  For the rest of the week, it will depend on the economic data.  We have seen good trends in manufacturing and it is difficult to see a reason why that would change this week.  And if that is the case, then downward pressure on MBS may resume this week.