It’s been an utterly hopeless week for domestic economic data so far, with nary a top tier report in sight. Not only that, but after last week’s ADP and NFP reports were so easily overlooked, who else would dare step up to the plate?
To be fair to econ data, it’s not ADP or NFP’s fault for failing to move markets. It’s not as if they weren’t inspiring enough to get the job done. The issue–as we’ve discussed so much that you may already know what’s coming–is that there have simply been bigger market movers about.
With that in mind, today’s Retail Sales data only has a chance to matter inasmuch as those “other” market movers remain at bay. That means we’d need to see an absence of any major moves in stocks or oil. Of course if stocks and oil are moving in the same direction suggested by the data, bonds might simply look like they were reacting to the data and we’d never really know which one was the bigger motivation.
One last little bit of complication is the 3-day weekend. Market participation can change in a few ways on these sorts of Fridays. On the one hand, some traders might simply be out of the office early–especially considering the die hard skiers on the East Coast will obviously be needing to come out west this year. On the other hand, traders who remain in the office tend to play things more conservatively ahead of 3-day weekends. This can mean a bias toward the closing of positions. If positions are generally longer vs shorter, that could be bad for bonds (but that’s just a guess based on available info. We can’t always know the true balance of trading positions until after the fact).