Central banks have failed to incite lasting motivation for bond markets to abandon their low, sideways depression.  Mario Draghi's comments about doing whatever it takes to protect the Euro and "believe him, it will be enough," certainly got markets in the mood for a good, old-fashioned showdown.  We'll admit, though we've generally been highly cynical about the Euro zone's ability to make the necessary political and economic progress to stave off some sort of collapse, we entertained the possibility that Draghi might have been able to get at least SOMETHING accomplished when he met with 'ze Germans' this week.

But Alas!  Yesterday morning's ECB press conference was downright uncomfortable to watch.  It seemed that Draghi didn't realize how or why his impassioned rhetoric caught markets' attention and more strikingly, that he actually thought the announced "gameplan" amounted to anything more than inconsequential hopes and goals.  Again and again, with almost every other reporter who took the mic, the same line of questions was revisited, and again and again, Draghi skirted issues or faced them head on, but with logic that we feel bordered on delusional.  At times, he even seemed indignant to be questioned on such things. 

We're normally not too animated in our criticisms, but what Draghi delivered yesterday relative to last week's posturing was a complete joke, and we'd imagine that it's done lasting damage to his credibility as a transparent communicator of policy goals and changes.  All of the whipsaw created by said posturing was swiftly undone over the past 24 hours.

In the previous session, the FOMC Announcement merely served to tide markets over ahead of the more anxiously awaited ECB Announcement.  As is now obvious, the Fed stayed even more "on hold" than most would have guessed, not even making any change to the ZIRP verbiage, let alone announcing any policy changes.  Bottom line, if the FOMC were any more "prepared to act," they'd be lecturing at Juilliard.

And so it came to be that bond markets are in the same territory they were before the central bank statements, and left only with what should have been the least significant of the week's three big-ticket events as the last chance for any significant guidance.  But will the jobs report even be able to deliver, or is that too much to expect given the epic indecision suggested by the Fed and ECB? 

In a word, yes... It is too much to ask.  There is only a small chance that NFP could print so high that it would change anyone's outlook, but it's possible.  Similarly, it would have to print extremely low in order to actually CHANGE what will already be happening in the coming days and weeks (that is, the low, sideways, depressed, apathetic rate range).   The good thing about the possibility of NFP failing to motivate markets in one direction or another is that it would be the best-case scenario for mortgage markets.  With Fannie 3.0s around 104-00, we don't exactly need face-melting rallies.  So we hope NFP doesn't print negative.  But we also could do without a panic-driven "what if the Fed never does a QE3" sell-off that could follow a 200k+ print.  Anything in between--even if it causes volatility tomorrow, isn't of much consequence after that, unless the rest of August's data begins building a similar consensus.