The Week Ahead: Limited Data Calendar Leaves Auctions, Greece in Focus

The Employment Situation Report is normally preceded by "sideways uncertainty" and followed by noticeable directionality.  But this time around, the opposite is true.  Although there were some fast and moderately large losses on Friday following the report, it could be argued that the "noticeable directionality" took place in the days leading up to the report, and the passing of the report--by the time this week's upcoming Treasury Auctions and European events are considered--will usher in the "sideways uncertainty." 

Case in point with respect to European events, Reuters reports that Greece basically cannot bring itself to accept the terms of their most recent bailout, thus effectively dooming themselves to default and/or EU exit.  Well...  They apparently do have until today:

( Reuters) - Greece's coalition parties must tell the European Union on Monday whether they accept the painful terms of a new bailout deal as EU patience wears thin with political dithering in Athens over implementing reforms.  Technocrat Prime Minister Lucas Papademos put on a brave face on Sunday as he tried to get leaders of the three parties in his government to sign off on terms of a 130 billion euro rescue, which Greece needs soon to avoid a chaotic debt default.  Papademos said in a statement the party chiefs - who may face angry voters in parliamentary polls as soon as April - had agreed measures including wage cuts and other reforms as part of spending cuts worth 1.5 percent of gross domestic product.  But a spokesman for the PASOK socialist party said a number of major issues demanded by the "Troika", representing Greece's EU, European Central Bank and IMF lenders, remained unresolved late on Sunday. 

Bond markets chopped around in a fairly narrow range overnight, in fairly low volume.   The Greece-related uncertainty helped 10yr yields walk in the door this morning abotu half a bp lower than Friday afternoon, just under 1.92.  MBS are opening right in line with those Friday afternoon levels as well.  Fannie 3.5's are currently unchanged at 103-23.  With no other significant scheduled data on tap, a Greek resolution, or lack thereof, is our best candidate for moving markets today.  The economic calendar stays light all week actually, with the only report drawing much attention away from 10 and 30yr auctions being International Trade on Friday.