With all the recent preference given to "tradeflows and technicals" in our analysis, we see the week ahead as standing a good chance of merging those more ethereal concepts with the tangible logic of fundamental data and auction results. In other words, technicals and tradeflows are still a major consideration, but whereas they utterly dominated last week's trade, this week's SCHEDULED events should do more to inform the next move in the technical framework. The new range is still defined by a 2.1-2.4% 10yr yield and we've only just tested the midpoint as of Friday (2.25).
Those same yields are kicking the week off a bit higher, currently in the 2.27's after rising into the mid 2.28's overnight. Stocks are up roughly 5 points in S&P Futures and Fannie 3.5 MBS are opened 10 ticks ower at 102-04 but have moved up to 102-08 in the first few minutes of the session.
This week marks month-end/quarter-end, as well as the end of the fiscal year for a not-insignificant participant in Treasuries and MBS: Japan. Bernanke speaks several times. There's an important 5yr Note Auction on Wednesday and GDP hits Thursday morning followed by more important economic data on Friday (more detailed economic calendar below).
0800 AM - FED SPEAK: BERNANKE
0830 AM - CHICAGO FED NATIONAL ACTIVITY INDEX
- Forecast: N/A vs. Previous: +0.22
(a monthly index designed to gauge overall economic activity, and weighted such that a "0" reading = average growth, unlike other survey's where "0" readings = no growth). The index showed above-trend growth last month (+0.22) and the month before (+0.54) after several below trend months previously.
1000 AM - PENDING HOME SALES
- Forecast: +1.0 vs. Previous: +2.0
("The index measures housing contract activity. It is based on signed real estate contracts for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes" - NAR).
Chart of Pending Home Sales through last month's reading of 97.0.
0900 AM - CASE-SHILLER HOME PRICE INDEX
Forecast: -0.2 vs. Previous: -0.5
1000 AM - CONSUMER CONFIDENCE
Forecast: 70.0 vs. Previous: 70.8
1000 AM - RICHMOND FED MANUFACTURING
Forecast: na vs. Previous: 20.0
1245 PM - FED SPEAK: BERNANKE
0100 PM - 2YR NOTE AUCTION
0700 AM - MBA MORTGAGE APPLICATIONS
Forecast: na vs. Previous: 681.9 ( Refi Index: 3603.5)
0830 AM - DURABLE GOODS (HEADLINE)
Forecast: +3.0 vs. Previous: -3.7
- EXCLUDING TRANSPORTATION ( +1.7 vs. -3.0)
- EXCLUDING DEFENSE & AIRCRAFT (+2.0 vs. -3.9)
0100 PM - 5YR NOTE AUCTION
0830 AM - GDP (FINAL 4TH QUARTER)
Forecast: +3.0 / Previous: +3.0
- DEFLATOR (+0.9 vs +0.9)
- FINAL SALES (+1.1 vs +1.1)
- PCE PRICE INDEX (+1.3 vs +1.3)
- CORE PCE PRICES (+1.3 vs +1.2)
0830 AM - CORPORATE PROFITS
0100 PM - 7 YR NOTE AUCTION
Forecast: na vs. Previous: +2.7
0830 AM - INITIAL JOBLESS CLAIMS
Forecast: 350k vs. Previous: 348k
- CONTINUING CLAIMS ( 3.35 mln vs 3.352 mln)
0830 AM - PERSONAL INCOME
Forecast: +0.4 vs. Previous: +0.3
- PERSONAL CONSUMPTION ( +0.6 vs +0.2)
- CORE PCE PRICE INDEX (+0.1 vs +0.2)
0945 AM - CHICAGO PMI
Forecast: 63.0 vs. Previous: 64.0
0955 AM - CONSUMER SENTIMENT
Forecast: 74.6 vs. Previous: 74.3