Bonds and MBS have firmed a bit on the heels of a successful 3 year note auction. 38 billion of the paper hit the tape one bp through the screen at 1.487%. Bid to cover results were very strong at 3.02 to 1 with Indirect bidders taking 54.2% of the issue. Give this one an A-. Tomorrow Uncle Sam will peddle 20 billion of 10 year notes and Thursday’s finale will sell 12 billion of 30 year bonds. The week ahead will be light on the data front, starting with the Fed’s Beige Book (report on economic conditions per district) on Wednesday. Thursday will feature the usual Weekly Unemployment Claims while Friday will clean up the week with Import pricing, Wholesale Inventories, and U of M Confidence indications. Bond buyers have kept today’s early weakness from falling below Friday’s low yet the rebound has still not made it back to Friday’s high. This is what we call an “inside day,” where patterns are mixed yet not able to make a major move one way or the other. Kind of like a Goldilocks market, not to hot, not to cold, but close to just right. Stocks are in the same place, bending but not breaking at they are up 30 something on the day. We’ll call the market neutral with what could be a quiet start to a quiet week.
Economic Calendar 9/8
Date/Time (Central) Indicator Period Est. Actual Prior Revised
9/8 14:00 Consumer Credit JUL -$4.0B — -$10.3B —
9/9 6:00 MBA Mortgage Applications 4-Sep — — -2.2% —
9/9 13:00 Fed’s Beige Book — — — — —
9/10 7:30 Trade Balance JUL -$27.0B — -$27.0B —
9/10 7:30 Initial Jobless Claims 5-Sep 552K — 570K —
9/10 7:30 Continuing Claims 29-Aug 6200K — 6234K —
9/11 7:30 Import Price Index (MoM) AUG 1.0% — -0.7% —
9/11 9:00 Wholesale Inventories JUL -1.0% — -1.7% —
9/11 9:00 U. of Michigan Confidence SEP 67.3 — 65.7 —
