The Day Ahead: Data Calendar Lightens. Looking To Defend Thursday's Bounce
Thursday began in much weaker territory for bond markets as 10yr yields edged into the 1.7's for the first time since early June. Things were at their weakest ahead of the 30yr Bond Auction but rallied moderately afterward. Even though 10's are now down to 1.65 in early overseas trading, we're still not feeling like we're totally out of the woods, but we're closer.
Today then, will really be about that ongoing saga of the late July to early August journey through the metaphorical woods for bond markets. After a fantastic rally over the last 5 months with only a few instances of major volatility, recent weeks have offered it in spades, beginning with a tough-talking Mario Draghi promising that ECB intervention will be enough to protect the Euro zone's fiscal house.
That Draghi speech caused the single worst day of selling for bond markets since the scary, fast sell-off in mid March. The selling continued right through yesterday, taking 10yr yields just over their 100 day moving average.
With little by way of economic data or events on the calendar, today will be our first chance to see if bond markets can bounce back. Granted, previous days have also provided this chance, but it didn't seem as likely with Auction supply looming and further supportive technical levels begging to be hit. Incidentally, we would have been more comfortable with 1.67% in 10yr yields acting as a supportive ceiling and this 1.73 business was about as high as we could imagine a "course correction" selling-spree could take us without signalling a shift in the broader "low and sideways" theme.
The domestic calendar is fairly thin with only Import and Export prices in the 8:30 slot. This doesn't interest us too much considering yesterday's trade balance was a non event, not to mention that markets haven't shown any interest in inflation reports. There's also the Federal Budget at 11:00, but this is also not expected to be a market mover. That leaves markets to "trade it out," hopefully shedding some light on whether or not the recent selling-spree has run its course.
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Week Of Mon, Aug 6 2012 - Fri, Aug 10 2012 |
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Time |
Event |
Period |
Unit |
Forecast |
Prior |
Actual |
| Mon, Aug 6 | ||||||
| -- | No Significant Scheduled Data | -- | -- | -- | -- | -- |
| Tue, Aug 7 | ||||||
| 13:00 | 3-Yr Note Auction | -- | bl | 32.0 | -- | -- |
| 15:00 | Consumer credit | Jun | bl | 12.00 | 17.12 | -- |
| Wed, Aug 8 | ||||||
| 07:00 | Mortgage market index | w/e | -- | -- | 945.7 | -- |
| 07:00 | MBA Purchase Index | w/e | -- | -- | 182.0 | -- |
| 07:00 | Mortgage refinance index | w/e | -- | -- | 5452.8 | -- |
| 07:00 | MBA 30-yr mortgage rate | w/e | % | -- | 3.75 | -- |
| 08:30 | Productivity Revised | Q2 | % | 1.4 | -0.9 | -- |
| 08:30 | Labor costs Revised | Q2 | % | 0.5 | 1.3 | -- |
| 13:00 | 10-yr Note Auction |
-- | bl | 24.0 | -- | -- |
| Thu, Aug 9 | ||||||
| 08:30 | Continued jobless claims | w/e | ml | 3.270 | 3.272 | -- |
| 08:30 | Initial Jobless Claims | w/e | k | 370 | 365 | -- |
| 08:30 | International trade mm $ | Jun | bl | -47.4 | -48.7 | -- |
| 10:00 | Wholesale inventories mm | Jun | % | 0.3 | 0.3 | -- |
| 10:00 | Wholesale sales mm | Jun | % | 0.2 | -0.8 | -- |
| 13:00 | 30-Yr Bond Auction | -- | bl | 16.0 | -- | -- |
| Fri, Aug 10 | ||||||
| 08:30 | Import prices mm | Jul | % | 0.0 | -2.7 | -- |
| 08:30 | Export prices mm | Jul | % | -0.1 | -1.7 | -- |
| 14:00 | Federal budget, $ | Jul | bl | -- | -- | -- |
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* mm: monthly | yy: annual | qq: quarterly | "w/e" in "period" column indicates a weekly report * Q1: First Quarter | Adv: Advance Release | Pre: Preliminary Release | Fin: Final Release * (n)SA: (non) Seasonally Adjusted * PMI: "Purchasing Managers Index" |
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