1. Wed, Feb 13, 2013
The Day Ahead: Retail Sales and 10yr Auction
Attempt to Break Monotony
chammond
BY MATTHEW GRAHAM Certified Mortgage
Planning Specialist
Mortgage Network, Inc
Perhaps Tuesday felt slightly more lively due to the fact that bond
markets were generally weaker as opposed to generally stronger on
clint-hammond.com
Monday. Perhaps it was the appearance of slightly more volume, more
chammond@mortgagenetwork...
discernible tradeflows, Japan back from vacay, Fed speakers, or the 3yr
Auction. But in truth, most, if not all of these things were duds. Volume Phone: (803) 771-6933
was only off the lows because Japan was back and domestic trading cut Mobile: (803) 422-6797
a far more narrow range in Treasuries and MBS than it did on Monday. Fax: (803) 771-6944
Facebook
China will still be out on Wednesday, but apart from that, it has all the Twitter
makings of a legitimate trading day with top tier data, top tier events, and
Linked In
an assortment of appetizers and apertifs along the way. Top tier
economic data honors go to Retail Sales at 8:30am. Business
Inventories for December (that's a long time ago, right?!) will be out at
10am, but few will care. The more interesting 10am event is testimony from FHA's Galante before the
House Financial Services Committee regarding the actuarial findings of the MMI fund in November.
The afternoon's top tier event arrives at 1pm with the 10yr Treasury Auction. Given the recently more rapid
evolution of the yield curve, markets may not fully show their hand (or their relief, as the case may be)
until Thursday's 30yr Auction, but 10's are always important, ESPECIALLY if the awarded yield is far from
expectations or if other auction metrics deviate greatly from recent averages. Whatever the case turns out
to be, bond markets are looking increasingly likely to shake off their recent nonchalance.
In the following chart of 10yr Treasury Futures, notice prices grinding into the longer term trendline,
pushed down for 2 months exclusively under the 21-day moving average (that doesn't happen
much... last time was late 2010). Tuesday showed us that there's plenty of room to play around between
the moving average and the longer term support (lower yellow line), but a break higher or lower is
increasingly likely.
2. MBS Live Econ Calendar:
Week Of Mon, Feb 11 2013 - Fri, Feb 15 2013
Time Event Period Unit Forecast Prior
Mon, Feb 11
-- No Significant Data Scheduled -- -- -- --
Tue, Feb 12
13:00 3-Yr Note Auction -- bl 32.0 --
14:00 Federal budget, $ Jan bl -21.00 -0.26
Wed, Feb 13
07:00 Mortgage market index w/e -- -- 849.8
08:30 Import/Export Prices Jan % 0.7 -0.1
08:30 Retail Sales Jan % 0.1 0.5
10:00 Business Inventories Dec % 0.3 0.3
13:00 10yr Note Auction -- bl 24.0 --
Thu, Feb 14
08:30 Initial Jobless Claims w/e k 360 366
13:00 30-Yr Treasury Auction -- bl 16.0 --
Fri, Feb 15
08:30 NY Fed manufacturing Feb -- -2.50 -7.78
09:15 Industrial Production Jan % 0.2 0.3
09:15 Capacity utilization mm Jan % 78.9 78.8
09:55 Consumer Sentiment Feb -- 74.2 73.8
* mm: monthly | yy: annual | qq: quarterly | "w/e" in "period" column indicates a weekly report
