The Day Ahead: Anything That Happens Should Happen Early

Yesterday

- Uneventful holiday-week trading; super low volume

- Fannie 4.0s in quarter point range since 930am Friday

- Treasuries grinding higher in yield in narrow range

- Data was overlooked, but was close to consensus anyway

Today

- Bond markets close early at 2pm ET

- They'll effectively close even sooner, probably not long after AM data

- Durable Goods at 830am is most significant, New Home Sales at 10am is runner up

- Simply observing and reacting; not reading anything into movement

Strategy

To at least the same extent as yesterday, today's session calls for auto-pilot in terms of market-watching.  It's not that today's data isn't necessarily useful in building a sense of economic momentum, but if it is, it's more likely to get it's due in the New Year in terms of trading response.

Officially, bond markets close early today (2pm ET) and are fully closed for the Christmas Holiday tomorrow.  Although the day is only three hours shorter than normal, and although holiday absences in financial markets tend to include some mention of algorithmic trading, even the algorithms duck out early on Christmas Eve.

Fun Fact: Last Christmas Eve, Fannie 4.0s "sold off" from 107-01 to 106-30, a whopping 3/32nds move that brought sorry and misery to no one, ever.