Good Monday AM,

Boring Monday. Here’s a few words from Matt Graham as there’s not much to share. In truth, there isn’t much on the calendar until Thursday when we receive unemployment claims as well as CPI.

Summertime Mondays–especially those without any significant calendar events–have a tendency to be lighter than normal in terms of volume and volatility. That’s holding true so far today, and it would be a victory if it continues to hold true considering Friday’s solid post-NFP gains. But even then, yields are still well inside the broader sideways range. That means we’re still waiting for some bullish or bearish impulse to challenge the boundaries of the “intermission” range that’s been intact for nearly 3 months now.

“Slow and sideways” will be a risk throughout the week as the calendar offers little of consequence until Wednesday afternoon at the earliest (10-yr Treasury auction).  The week’s only big ticket economic report is the Consumer Price Index on Thursday, but it seems that markets are onboard with the transitory inflation spike narrative.  As such, there would need to be another surprising pop in Core CPI that far outpaces forecasts in order to cause much of a bond market reaction.

This leaves most of the focus on supply, both in the form of the week’s scheduled Treasury auctions and any potential corporate bond issuance.  To a lesser extent, progress in infrastructure legislation could also speak to Treasury supply needs going forward.

Please remain safe and healthy, make today great!