Did anyone else have to sit through the drug addiction video (or was it a book?) in grade school (or was it middle school?) where the main character kept returning to this amazing fantasy of driving an exotic sports car.  Each time, he had to drive farther and faster to get the same enjoyment.  You get the idea.

Same story for bond markets when it comes to overseas economic/political/debt drama.  We need more and more in order to fuel an ongoing rally.  As of this morning, we just took a hit of the same drug that made us high on Friday, and...

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...nothing happened.

Perhaps, if the Turkish drama spirals out of control in a bigger way, bonds will be more willing to entertain a break below that white dotted line.  Until then, we're left to wonder if this little diversion has run its course.

There won't be much help from data or events in the first half of the week.  Big-ticket data doesn't show up until Wednesday with Retail Sales at 8:30am, and that's the only top tier report, although there are several mid-tier reports on Wed-Fri.

In the bigger picture, there's a formidable floor ahead if yields do manage to resume the rally.  2.82% is where the most recent sideways range bottomed out, and it held up remarkably well in terms of turning away all attempts to move toward lower rates.  Outside a few weeks this spring and a single day following the Italian political drama, 2.82% has essentially been the floor for 10yr yields ever since it was broken as a ceiling at the beginning of the year.

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MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 4.0
101-25 : -0-01
10 YR
2.8804 : +0.0214
Pricing as of 8/13/18 9:31AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Tuesday, Aug 14
8:30 Import prices mm (%)* Jul 0.1 -0.4
8:30 Export prices mm (%)* Jul 0.2 0.3
Wednesday, Aug 15
7:00 MBA Purchase Index w/e 233.1
7:00 Mortgage Refinance Index w/e 927.6
8:30 Retail Sales (%)* Jul 0.1 0.5
8:30 NY Fed Manufacturing Aug 20.00 22.60
8:30 Productivity Preliminary (%) Q2 2.3 0.4
8:30 Labor Costs Preliminary (%) Q2 0.3 2.9
9:15 Capacity Utilization (%) Jul 78.2 78.0
9:15 Industrial Production (%) Jul 0.3 0.6
10:00 NAHB housing market indx Aug 67 68
10:00 Business Inventories (% ) Jun 0.1 0.4
Thursday, Aug 16
8:30 House starts mm: change (%) Jul -12.3
8:30 Building permits: number (ml)* Jul 1.310 1.292
8:30 Housing starts number mm (ml)* Jul 1.260 1.173
8:30 Philly Fed Business Index * Aug 22.0 25.7
8:30 Build permits: change mm (%)* Jul -0.7
8:30 Jobless Claims (k) w/e 215 213
Friday, Aug 17
10:00 Consumer Sentiment Aug 98.0 97.9
10:00 1yr Inflation Outlook (%)* Aug 2.9
10:00 5yr Inflation Outlook (%)* Aug 2.4
10:00 Leading index chg mm (%) Jul 0.4 0.5