NOTE: Bond markets and mortgage lenders (and banks, among other things) will be closed on Monday for Labor Day.
This morning's headline suggests that economic data "probably" won't matter, but if yesterday's activity is any indication, "probably" is far too generous. Markets shrugged off a trifecta of stronger data in favor of European market influence and to some extent, geopolitical risk. On top of that, there's also the matter of "month-end" which compels some bond market participants to hold a certain balance of Treasuries in order comply with their portfolio requirements.
Keep in mind though, that there's usually an underlying theme in place, regardless of economic data or geopolitical events. When the data and events support the theme, it may look like the data and events matter as markets use them as cover to get where they were going anyway.
Today's data includes Incomes and Outlays at 8:30am, which is currently relevant considering the fact that wages are a hot topic. Chicago PMI arrives at 9:45am, and while it historically has a good amount of market movement potential, that's been less true in recent market conditions. Consumer Sentiment is at 9:55, and it's rarely been less relevant than it is now. Exciting, I know, but maybe something interesting will happen overseas!
That's a thought that will be much on the minds of traders as they gear up for the 3-day weekend. It's a tough call right now as to whether or not that would be bullish or bearish. On the one hand, it's generally safer to assume things will deteriorate until they make a marked turn (deterioration = good for bond markets). On the other hand, we've had a pretty stable run of improvement this week, and even the strongest trends are dotted with nominal corrections.
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