Most of today’s movement was seen in between data releases as opposed to immediately following. In other words, Housing Starts came out this morning and markets didn’t move. It wasn’t until after Industrial Production at 9:15 (though not because of it) that bond markets weakened by any noticeable amount. Even then, the trades that made the difference came across at 9:19am and that’s not the kind of thing we typically see if movement is data-related. All we got in the first 10 minutes after Consumer Sentiment was volatility, then trading levels simply drifted into stronger territory by the close, grinding progressively lower in volume all the while.
While trading levels are the best all week, the outright gains were small enough that no important technical levels were seriously tested. If 10yr yields, for instance, were moving quickly below 2.82, that would be meaningful, but as it stands, we’re simply grinding into the week’s best levels. There’s nothing wrong with that at all, and we’d hesitate to draw too firm a conclusion based on Friday afternoon in light volumes anyway.
Next week is precious little solace as far as activity is concerned. It’s the token mid-winter vacation week where the economic calendar conspires with a 3-day weekend. The following week, however, brings a rather important FOMC Announcement where we get to see if the latest Payrolls numbers will have swayed their stance. Surveys say no, but some of that sentiment is floating around.