The Day Ahead: Less Domestic, More European, and 10 Wise Men

Monday's opener left a lot to be desired in terms of activity, but made up for it by being a solid day for MBS specifically.  Treasuries caught a bit of benefit as well, but it's hard to say it was necessarily the product of the data any more than the low volume environment.  Weaker-than-expected ISM Manufacturing data certainly didn't hurt, but it would have needed more friends if it hoped to incite more meaningful breaks of technical levels in Treasuries and MBS.

Today's session clearly has no hope in the "friends" department as far as domestic economic data is concerned.  With only February Factory Orders by way of widely followed releases, it's the slowest day of the week for the US calendar.  But what's lacking in the US, arrives in spades for the EU, who is back from holiday in more ways than one.  

Apart from a major glut of European economic data, markets are also expecting the Roman holiday to end--not the movie, but the prolonged absence of any meaningful political headlines from Italy.  To that end, President Napolitano's council of "10 wise men" is expected to announce "something" (we're not sure what) that may or may not be important.  Specifically, an emergency gathering of 10 less-than-impartial and mostly political figures in the Italian government will deliver their first proposals to President Napolitano.  

This could make for news today, or could be something we don't hear about for several days.  On the chance that it does create meaningful news and on the chance that news takes several days to materialize, NFP will be coming right up on Friday morning and could create a bit of perfect storm, either helping domestic bond markets break through recent resistance or solidify a scarier bounce therefrom.