The government shutdown is now the longest ever, and there are a variety of interesting implications.  The first is that multiple economic reports will not be released as scheduled.  The notable examples in the current week include Retail Sales and the New Residential Construction report (housing starts and building permits).  An absence of econ data naturally increases uncertainty.  

In and of itself, uncertainty is good for the bond market, but investors will still have access to a few other economic reports that could help form a consensus about what the economy might be doing.  Of those, the only reports on this week's calendar with any market-moving history worth mentioning are the Philly Fed Index on Thursday and Consumer Sentiment on Friday.  To put their past market-movement potential in context, it wouldn't be a surprise in the slightest if markets didn't react at all.  But at least they provide a few "maybes" on an otherwise barren week for economic data.

The second implication of the record-setting shutdown is the fact that the fallout will become more and more relevant to the economy in ways we've never been able to witness.  Investors will increasingly ask questions that hold future growth prospects up to the candle. 

This has actually already begun to happen (because there hasn't been a compelling reason to expect this shutdown NOT to break records for several weeks now).  As such, it is already benefiting the bond market.  Conversely, any benefit realized by bonds due to shutdown-related uncertainty runs the risk of being abruptly unwound--at least partially--if an agreement is suddenly reached.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 4.0
102-01 : +0-02
Treasuries
10 YR
2.6810 : -0.0180
Pricing as of 1/14/19 8:36AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Tuesday, Jan 15
8:30 Producer Prices (%) Dec -0.1 0.1
8:30 NY Fed Manufacturing Jan 10.75 10.90
8:30 Core Producer Prices YY (%)* Dec 2.9 2.7
Wednesday, Jan 16
7:00 MBA Purchase Index w/e 255.2
7:00 Mortgage Refinance Index w/e 987.9
8:30 Retail Sales (%)* Dec 0.2 0.2
8:30 Export prices mm (%)* Dec -0.6 -0.9
8:30 Import prices mm (%)* Dec -1.3 -1.6
10:00 NAHB housing market indx Jan 56 56
10:00 Business Inventories (% ) Nov 0.3 0.6
Thursday, Jan 17
8:30 Building permits: number (ml)* Dec 1.290 1.265
8:30 Housing starts number mm (ml)* Dec 1.254 1.256
8:30 Build permits: change mm (%)* Dec -0.4
8:30 Philly Fed Business Index * Jan 10.0 9.4
8:30 House starts mm: change (%) Dec 3.2
8:30 Jobless Claims (k) w/e 220 216
Friday, Jan 18
9:15 Capacity Utilization (%) Dec 78.5 78.5
9:15 Industrial Production (%) Dec 0.2 0.6
10:00 Consumer Sentiment Jan 97.0 98.3
10:00 1yr Inflation Outlook (%)* Jan 2.7
10:00 5yr Inflation Outlook (%)* Jan 2.5