For the first time in the history of the Day Ahead, I'm referencing an oil inventory report as a solid potential market mover.  This is significant, because even when the rest of the market was attributing every move in every market to the slightest change in oil prices, I advocated heavy skepticism.  In fact, I still do--at least when it comes to relying on oil to explain a full day's momentum in stocks/bonds/etc.  Charts clearly show that this isn't the case, though they do clearly confirm that SOME of the bigger moves in oil are definitely having a short term impact.

2015-2-3 oil2

If that weirdly flat bouncing of the yellow line caught your eye in the chart above, you're not alone.  It looks very much like a bounce driven by technicals and tradeflows (which would make good sense considering the levels and the dates).  It's almost as if the weakness that was ostensibly a risk on Monday took a day off and showed up yesterday instead.  It's caused 180 degree shift in the technicals and quickly put us in a position to watch 1.85/1.85 for defense.

2015-2-3 techs

Well before the oil data at 1030am, bond markets will have had their fill of potential market movers at home and abroad.  Overnight data includes Spanish, Italian and Eurozone PMIs and Eurozone Retail Sales.  Domestic data kicks off early with ADP Employment at 815am and ISM Services PMI at 10am--both top shelf reports in terms of market movement potential.

Then again, markets could just as easily choose to respond to an unexpected headline relating to oil, Greece, or some facet of ECB QE. 

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
102-28 : +0-00
FNMA 3.5
105-11 : +0-00
FNMA 4.0
106-32 : +0-00
2 YR
0.5080 : -0.0080
10 YR
1.7810 : -0.0170
30 YR
2.3710 : -0.0160
Pricing as of 2/4/15 7:36AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Wednesday, Feb 04
7:00 Mortgage Market Index w/e 544.2
8:15 ADP National Employment (k)* Jan 225 241
10:00 ISM N-Mfg PMI * Jan 56.3 56.5
10:30 EIA weekly crude stocks (ml) w/e 3.467 8.874