With no major domestic or overseas economic data on tap and no game-changing headlines expected, yesterday’s excruciatingly slow session may well have been in the cards. By that same rationale, today’s session should also be slow, even if not quite in the same league as Monday. The only real differences are in the quantity of European economic reports and the beginning of the US Treasury Auction cycle. Even though the latter sounds like it might be worth perking up over, we have yet to see a 3yr Auction “matter” since Fed Funds Rates hit 0-25, let alone since the verbiage change in August 2011.
That said, we’re cognizant that times, they are a-changin’ with respect to feeling out the eventual curtailment of QE and indefinitely low Fed rates (the collective ‘stuff’ that effectively anchors the short end of the yield curve, rendering short term auctions less meaningful to the longer end of the yield curve that’s more in tune with mortgage rates). So we can’t help but start to treat 2 and 3yr auctions as “fire drills” for future auction vigilance. More to the point, the entirety of Tuesday’s session is similarly “going through the motions” until the meatier bits of the econ and event calendar arrive on Wednesday with Retail Sales and the 10yr Auction. Tuesday’s events, by contrast would have to be relatively more shocking to move the needle.
The following charts of 10yr Treasuries are from yesterday morning, but perfectly intact today as well, consider yesterday’s lack of movement:
and a new one for today with post-roll 3.0s showing “decision time” right around the 102-00 level