We'll get a better idea today about whether or not the recent bond market rally has been totally a factor of a flight to safety or if there really are legs under a potential shift in investor attitudes. Equity futures are on the mend following a three-day sell-off that has pushed the Dow Jones Industrial Average down 323 points.

“For the first time in days, there seems to be an aura of calm in financial markets,” said analysts at BMO Capital Markets, noting that European bourses are rallying up to 1% and nearly all Asian markets closed the week higher.

S&P 500 futures are up 8.5 points to 1,311.20 and Dow futures are trading 78 points higher at 12,115.  Light crude oil turned back to double-digits yesterday as Saudi Arabia started to boost production and reports from the middle-east said the ongoing political turmoil hadn’t disrupted production. Light crude is currently down 0.14% to $97.06 per barrel.  Gold prices are 0.30% higher at $1,405.70 per ounce.

The 10-year Treasury traded with a yield of 3.44% and 3.47% overnight, after falling by five basis points to close at 3.44% yesterday. Benchmark 10s are currently -5/32 at 101-10+ yielding 3.466%. The FNCL 4.5 MBS coupon is -2/32 at 101-20.

Key Events Today:

8:30 ― Fourth-quarter GDP is expected to get revised up by two-tenths to 3.4%. One reason for the gain, according to BBVA, is that international trade statistics point to a stronger contribution of net exports, which should more than offset a downward revision to personal consumption.

“Export growth and inventory investment look to have been stronger than the BEA had assumed,” added economists from Nomura Global Economics. “In addition, nonresidential structures construction activity significantly exceeded the BEA's assumption, adding 0.1 percentage points to GDP growth. By contrast, downward revisions to December retail sales and smaller-than-expected public construction spending partly offset the positive gains from those components.”

9:55 ―The Reuters /U of Michigan Consumer Sentiment survey is anticipated to remain at 75.1 in the revised February reading, or just 0.9 points up from the January survey. The lack of movement contrasts with the Conference Board’s consumer confidence survey, which surged ahead 5.6 points to a three-year high earlier this week.

“Consumers are feeling more optimistic due to gains in the stock market and an improving trend in the labor market,” said economists at IHS Global Insight, “but their optimism remains constrained by higher gas and food prices, and a poor outlook on the housing front.”

10:15 ― Jeffrey Lacker, president of the Richmond Fed, comments on stress tests at US Monetary Policy Forum in New York City. He is joined by Governor-nominee Peter Diamond. At 1:30, the Federal Reserve’s vice-Chairperson Janet Yellen speaks there on policy.

10:15 ― The Fed will purchase an estimated  $6-8 billion in Treasury Coupons maturing between 5/15/2018 and 2/15/2021