There are no significant economic reports on the calendar today, and the week's auction cycle is already wrapped up. While there are two Fed speakers, the speeches are unlikely to be major market movers.
That leaves Europe and Equities markets as the two key considerations for bond markets. As always, the technical/tradeflow landscape can play a part as well. In that regard, 10yr yields don't have any clearly delineated technical targets immediately underfoot (i.e. no major lines in the sand that stand out above any others as a target for a bounce or acceleration).
The potential big deal in equities markets is the earnings calendar. Wells Fargo reports today and its mortgage business will be one of the focuses for investors. Not only that, but as the supreme overlord of the mortgage market, investors can treat the mortgage-related portions of the earnings report as some sort of economic indicator for the housing market.
That, of course, would be a horrendous mistake considering Wells is anything but indicative of the general state of affairs in housing and mortgages. It's not that they don't do a lot of loans, simply that a lot of loans they do are for lower interest rates than their peers in exchange for deposit and investment banking business. Their last earnings report spoke to these trade-offs (slinging sweetheart rates in exchange for deposits). This one might too. As a sort of an aside (for the mortgage world anyway), BofA reports as well.
Then there's Eurodrama. Yes it's back, but only in terms of the general domino effect at risk. The size of the dominoes is greatly reduced from the heady days of 2010-2012--at least for now. Even so, domestic markets have already proven they're willing to tune in to that drama, so it's merely a question of whether it flares up today or not. The most imminently interesting thing that could happen for US bond markets would be a break of the all-time lows in German Bunds. They were close yesterday.
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