Last week was brutally slow, punctuated by an early close on Tuesday, the Christmas holiday on Wednesday and a general absence of volume and volatility for everything else.  While the current week also has a day and a half missing due to the New Year holiday, it should prove to be something of a warm-up for increased activity in the following week (which contains Nonfarm Payrolls).  The only major data set for today is the Pending Home Sales index at 10am.

The chart below shows 10yr yields for the past 9 months and focuses particularly on the major post-June-FOMC trading range between 2.47 and 3.01.  The last three instances where these bookends came into play have been characterized by volatility.  But the most recent example last week was instead the result of a sober march toward the weakest levels in 2+ years.  Until now, the lines in the sand have been clear.  If we soon break higher into the 3's, we'll be in uncharted territory to a greater extent, potentially increasing volatility.


Treasury Chart

Pending Home Sales

This Week's Economic Calendar
Monday, Dec 30
8:30 Midwest manufacturing * Nov 97.4
10:00 Pending homes index Nov 102.1
Tuesday, Dec 31
9:00 CaseShiller 20 mm SA (%)* Oct 0.8 0.9
9:45 Chicago PMI * Dec 61.0 63.0
10:00 Consumer confidence * Dec 76.0 70.4
14:00 New Year's Eve - Early Close 2pm ET
Wednesday, Jan 01
0:00 New Year's Day - Bond Markets Closed
Thursday, Jan 02
8:30 Initial Jobless Claims (k)* w/e 338
10:00 ISM Manufacturing PMI * Dec 57.0 57.3
10:00 Construction spending (%)* Nov 0.6 0.8