The Week Ahead: Limited Economic Data, Treasury Auctions and Euro Headlines

Bond markets were closed for Columbus day yesterday although stock markets remained open.  That provided a brief, low-volume glimpse into trading sentiment on the heels of last week's Employment Situation Report, which proved to be unfriendly for rates.  But if Monday's action in stocks and futures was any indication (and it might not be given the holiday volumes), it looks like a relentless October sell-off has yet to materialize this year. 

Although Octobers have proven to ugly months over the past three years (as far as interest rates are concerned), we don't have anything other than that past precedent along with concern stemming from last week's NFP reaction to fuel fears of a repeat performance.  In other words, signs of a "big, ugly sell-off" are not imminent, but we'll force ourselves to adjourn the 3-day weekend to pay attention just the same.

Tuesday is a good day to adjust back to the rigors of reality as the calendar is the least burdensome of the week.  There are a few scattered, bottom-drawer economic reports in the morning, and a few opportunities for Euro headlines in the overnight session including an IMF meeting and a Draghi press conference.  The afternoon sees the inception of this week's Treasury auction cycle with 3yr Notes at 1pm.

The rest of the week is slightly more robust in its offerings of economic data and events.  The auctions continue with 10yr Notes on Wednesday and 30yr Bonds on Thursday.  Data highlights include the Fed's Beige Book and Wholesale Inventories tomorrow as well as International Trade, Import/Export Prices, and Jobless Claims on Thursday.   Friday rounds out the light week of data with Producer Prices and Consumer Sentiment.  Earnings season begins this week and should keep things more interesting than they otherwise would be for stocks.  So we'll keep an eye out for listless bond markets turning to the stock lever for motivation.