The Day Ahead: Hotly Anticipated Events Arrive

After nearly a month of waiting, the three days are now upon us that stood out as the most significant three days all the way back on July 8th (the Monday after the July 5th NFP rout).  Back then, however, I gave far too much credit to the intervening events (which have since proven completely insignificant), but the focus was then and continues to be on today and Friday:

The implication here is something to the tune of "no rest for the weary," as there are key FOMC events every week for the next three, building to a head on July 31st (and then possibly another head 2 days later when the next NFP hits) - 'Day Ahead,' Jul 8, 2013

In the sense that these three days are "the thing" for which we've been waiting, we'll come away with a 'new knowledge of reality' that comes not from 'ideas about the thing, but the thing itself.'  Even Wallace Stevens would have been sure to point out that "the thing" is not only a 2 day affair this week, but MUST include the September 18th FOMC Announcement.  If we maintain even a remote semblance of our current course, September 18th makes the next three days look like just more ideas that can't possibly describe the reality of what's to come. 

The counterpoint is that markets can reasonably assume what September 18th will look like based in large part on these three days.  In that sense, much is at stake.  At the very least, it's reasonable to assume we now bid farewell to the relatively narrow ranges of the past 5 sessions and attempt to move higher or lower out of this recently consolidative patch in the long term trend higher in rates (note that we ended Tuesday right at the same 2.62 inflection point where yields settled after June's FOMC Announcement and July's NFP walloping).  Yields are erring on the high side of the 2.46-2.62 range because it's easier to believe that we're headed higher in rates than it is to try to guess when and how a more meaningful counter-trend move could evolve.