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Wed, Feb 13, 2013The Day Ahead: Retail Sales and 10yr AuctionAttempt to Break Monotony chammondBY MATTHEW GRAHAM Certified Mortgage Planning Specialist Mortgage Network, IncPerhaps Tuesday felt slightly more lively due to the fact that bondmarkets were generally weaker as opposed to generally stronger on clint-hammond.comMonday. Perhaps it was the appearance of slightly more volume, more chammond@mortgagenetwork...discernible tradeflows, Japan back from vacay, Fed speakers, or the 3yrAuction. But in truth, most, if not all of these things were duds. Volume Phone: (803) 771-6933was only off the lows because Japan was back and domestic trading cut Mobile: (803) 422-6797a far more narrow range in Treasuries and MBS than it did on Monday. Fax: (803) 771-6944 FacebookChina will still be out on Wednesday, but apart from that, it has all the Twittermakings of a legitimate trading day with top tier data, top tier events, and Linked Inan assortment of appetizers and apertifs along the way. Top tiereconomic data honors go to Retail Sales at 8:30am. BusinessInventories for December (thats a long time ago, right?!) will be out at10am, but few will care. The more interesting 10am event is testimony from FHAs Galante before theHouse Financial Services Committee regarding the actuarial findings of the MMI fund in November.The afternoons top tier event arrives at 1pm with the 10yr Treasury Auction. Given the recently more rapidevolution of the yield curve, markets may not fully show their hand (or their relief, as the case may be)until Thursdays 30yr Auction, but 10s are always important, ESPECIALLY if the awarded yield is far fromexpectations or if other auction metrics deviate greatly from recent averages. Whatever the case turns outto 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 doesnt happenmuch... last time was late 2010). Tuesday showed us that theres plenty of room to play around betweenthe moving average and the longer term support (lower yellow line), but a break higher or lower isincreasingly likely.
MBS Live Econ Calendar: Week Of Mon, Feb 11 2013 - Fri, Feb 15 2013 Time Event Period Unit Forecast PriorMon, Feb 11-- No Significant Data Scheduled -- -- -- --Tue, Feb 1213:00 3-Yr Note Auction -- bl 32.0 --14:00 Federal budget, $ Jan bl -21.00 -0.26Wed, Feb 1307:00 Mortgage market index w/e -- -- 849.808:30 Import/Export Prices Jan % 0.7 -0.108:30 Retail Sales Jan % 0.1 0.510:00 Business Inventories Dec % 0.3 0.313:00 10yr Note Auction -- bl 24.0 --Thu, Feb 1408:30 Initial Jobless Claims w/e k 360 36613:00 30-Yr Treasury Auction -- bl 16.0 --Fri, Feb 1508:30 NY Fed manufacturing Feb -- -2.50 -7.7809:15 Industrial Production Jan % 0.2 0.309:15 Capacity utilization mm Jan % 78.9 78.809:55 Consumer Sentiment Feb -- 74.2 73.8* mm: monthly | yy: annual | qq: quarterly | "w/e" in "period" column indicates a weekly report