Pound for pound, this is one of the busiest weeks of the year. There are relevant economic reports every day as well as Fed speakers and the last trading day of Q2. Wrapping it all up (sort of) is June Nonfarm Payrolls. This time, however, it arrives on Thursday due to the Independence Day holiday, and it's followed by several other moderately important reports, all before the day ends 3 hours early.
All this transpires against a bond market backdrop with slightly higher than average stakes. After holding ground without going over 2.66 in June, 10yr yields rallied over the past two weeks. They've reached a bit of a decision point where rallies usually either bounce or go sideways. Infrequently, momentum can continue through the technical barriers in the chart below, but rarely in a strong and impressive way.
If we hope to see a strong and impressive continuation of the recent rally, we'd need nearly an entire week of disappointing economic data. Even then, several of this week's key reports could still come in fairly downbeat without doing much to alter the bigger picture. For instance, ISM Manufacturing could fall quite a bit without violating its longer term parabolic bounce seen here:
A slightly better bet for an early hint of weakness could come from today's Pending Home Sales data. This report's M.O. is to serve as an advance indicator of Existing Home Sales data. The bounces here are still fairly young, and any meaningful downturn in Pending Home Sales could make the past few months merely look like a correction in a longer-term downtrend that started with the mid-2013 rate spike.
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