Last Week

- Focus was on September's delayed release of Nonfarm Payrolls

- Payrolls data was weaker than expected.  Bond markets rallied

- Rates hit new 4-month lows but leveled off and drifted sideways into weekend

This Week

- Scheduled + Rescheduled data makes for a deluge

- Auction cycle (begins Monday) ends on Wednesday with ADP, GDP, and FOMC

- No NFP on Friday, but lots and lots of other data.

- Wednesday afternoon is the focal point

Strategy

Despite the fact that last week saw the return of the critically important Employment Situation report, this will be the week where the majority of the delayed data gets caught up.  Not only are several of the reports significant, but they coincide with a Treasury auction cycle, an FOMC Announcement, and month-end trading considerations. 

The FOMC Announcement would typically be the most significant event this week, but in light of recent events and several candid remarks from Fed speakers that would normally express less support of quantitative easing, we can be utterly certain that there won't be any moves that diminish the Fed's direct support of the bond market. 

All that's left to assess is how much of a shift in the other direction we'll see.  This isn't at all likely to come in the form of policy changes, but the verbiage of the announcement can always move markets if it helps refine future expectations.

Beyond the Fed, there's simply a ton of data.  All the moderately-to-highly important reports show up in the economic calendar below, but the highlights are worth extra mention.  The first biggie is Retail Sales on Tuesday morning.  Consumer Confidence--on the same day--is also no slouch, and notably one of the only October reports this week (may provide early insight into effects of the shutdown).

The other notable October report arrives the following morning in the form of the ADP Employment Report.  This normally coincides with the official payrolls report on Friday, but due to the shutdown, the BLS needs another week.  The ADP report has been far more correlated with NFP since the revised ADP methodology at the end of 2012. 

That's just the beginning for Wednesday.  A delayed final reading of GDP hits at 8:30am along with Consumer Prices.  The Auction cycles finishes up at 1pm, and the FOMC Announcement goes off at 2pm.  All of the above takes place on the second-to-last day of the month--a time when the phantom forces of month-end tradeflows can be exerting just as much force on trading levels as the economic data. 

To top it all off the following week brings another instance of the Employment Situation Report (aka "nonfarm payrolls," "NFP," or "The jobs report").  These two weeks will go a long way toward setting the trajectory for the rest of the year.

Charts

If we're considering setting the trajectory for the rest of the year, it's worth noting that the last 5 months have been easily broken up into quarter point ranges

- 2.0 -2.25 in mid May

- 2.50 to 2.75 after June FOMC and into mid August

- 2.75-3.0 until September FOMC

- now back to 2.5-2.75 after FOMC, debt-ceiling drama, and NFP

So far, so simple.  If economic data continues to weaken 2.25-2.50 isn't an unrealistic hope, but if it firms, the current range could continue holding.