Bond markets continue to be relentlessly sideways. Just when Treasury yields were staging for their best chance at breaking out of a 3-month range-bind, yields spiked late last week after a token amount of deescalation in Ukraine following the Geneva talks. The deescalation was short-lived, however, and the selling pressure that looked poised to carry yields all the way to other side of this historically narrow range has instead stopped more or less dead-center, waiting... for "something."
Determining the identity of that "something" has proven difficult. Traders seem to be picking and choosing when the situation in Ukraine matters rather serendipitously. The only safe conclusion is that there's some measure of bullishness intact in bond markets thanks to the ongoing geopolitical risks.
There will always be a certain amount of unseen motivation that can only be guessed at deductively. This can come from things like traders' positioning, which creates market movement independent of economic fundamentals. The same is true of corporate debt hedging as firms may move into and out of the Treasury market as a way to protect against interest rate risk during the time where they're taking orders for their own debt issuance.
Then there's the economic data, which has gotten token levels of acknowledgement from markets, but nothing too exciting. Even so, it's one of the only market moving considerations that adheres to a calendar and that tends to produce reliable results (most of the time). In other words, we know that Jobless Claims will come out at 8:30am, and we know that if it's significantly stronger than expected, bond markets could suffer but that we stand a fighting chance if it's much weaker.
From there, the question is how much should we care about certain reports? With everything but the Employment Situation report, that can be a bit of a moving target. Jobless Claims data is always a contender for market movement, but there are two other considerations today. The first is that Durable Goods report at the same time. It's important enough of a report that it could counteract the impact from Jobless Claims if the two are at odds, or noticeably magnify the effects if they synergize. Jobless Claims likely has a bit of an edge today because it covers the week in which businesses were surveyed for the upcoming nonfarm payrolls number. Markets tend to pay more attention to the so-called "survey-week claims," assuming it speaks that much more directly to NFP.
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