From an old-school, conventional market-watching point of view, there is significant data on tap today in the form of ISM Non-Manufacturing at 10am.  Both the ISM indices are consistently in the running as the next biggest market mover following NFP.  They're fairly consistent too.  That's good to know as it tells us a lot about what markets are thinking on the occasions where the data is far from consensus yet doesn't produce a reaction.

If today turns out to be one of those days, we don't have to look far for evidence of what else might be on the market's mind.  The whole month of January is one big trial by fire for Europe.  With markets widely expecting some movement on QE at the January 22nd meeting, and with speculation that the ECB's hands might be tied in some way until after the Jan 25th Greek election, there's certainly some panic in the air. 

That panic was evident in the quick run to multi-year lows for the Euro yesterday and gigantic sell-off in European equities.  There was also a lot of talk in the news about oil.  Frankly, I'm super tired of it.  It's gotten to be one of those things that gets credit simply because it stands out.  Time and time again, both stocks and bonds have cut their own paths relative to the price of oil.  To repeat: if anything, it's more of an effect than a cause. 

Don't get me wrong, oil is significant for its role in the long-term inflation outlook, but only inasmuch as it's yet one more piece of evidence suggesting significant headwinds for inflation.  If oil were to magically rise above $100 / barrel, there would still be so many headwinds and so much unresolved drama in the Eurozone that nothing much would change for the bond market outlook.  The best evidence for this is that nothing much was different about the bond market outlook before oil began tanking.  We've been talking about the trend being positive for bonds until Europe turned a corner for the better part of 7 months now and Europe obviously hasn't turned a corner.