MBS Day Ahead: After Sidestepping on Monday, Tuesday is Week's First Chance for Action

At the risk of confusing "first chances" with "good chances," there's at least some chance that today will succeed where yesterday failed.  As we discussed yesterday, Mondays in the summer tend to be the third day of the weekend as far as bond markets are concerned.  This dynamic wasn't helped by the absence of any significant data or events.

Today's calendar isn't much more active in terms of the number of reports (there are only two), but at least one of the events--ISM Non-Manufacturing--is a perennial "big market mover."  Whether or not it fills that role today is less of a given because it's falling after NFP.  It doesn't usually do that, and it's predictive input for NFP is one of the reasons for its cachet.

Even if we see substantial market movement today, we were so deprived of it last week that we're not likely to learn anything new just yet.  The bigger question remains whether US bond markets will continue to be weighed down by global concerns led by Europe or finally break into the rising rate trends that were widely expected heading into the year.