The first week of September is here, and with it, the first salvo of the "big ticket events" that we've been waiting for since the rally that followed the FOMC Minutes on August 22nd.  That rally was characterized by bond markets battling back to long term inflection points such as the high 1.6's in 10yr yields and the important 103-00 price level in Fannie 3.0 MBS. 

After getting back to those inflection points, markets were ostensibly a bit burnt out (or simply left with limited incentive to move higher or lower) and began coasting sideways.  We noted that Friday could see a "lead off" (read more...) and indeed it did, but in laying out the possibility, we also noted that the lead off itself, was not an indication that the same momentum would continue into the current week.

It continues to be the case that markets don't have any major reasons to begin trending in either direction (not by leaps and bounds anyway) until NEXT week's big ticket events have come and gone as well.  But that won't stop the current week's events from trying.  The few pieces of normally important economic data on the first two business days of the week will be overshadowed by the events on the last two days.

Thursday's big-ticket event is the ECB Announcement and Draghi press conference that follows.  Even though markets aren't expecting any major announcement regarding the potential ECB Bond-Buying until after next week's German court ruling, this is still a milestone event.  Reason being: Draghi won't simply not address ECB bond buying (in fact, he's not even waiting for Thursday to hint at this considering comments on Monday, indicating that ECB purchases of up to 3-year maturities would not violate the Euro Zone treaty).  More to the point, even if he doesn't announce something new and wondrous, it still fuels speculation of what lies ahead and further informs the market's reaction to the German court ruling in the following week.

Friday's big-ticket event is the monthly Employment Situation Report.  This is likely to fuel the debate as to exactly how the Fed might act in the following week's FOMC Announcement and/or the press conference and forecasts.  The weaker the print on Non-Farm Payrolls, the more likely a September announcement of additional easing becomes.  That said, "easing" has an increasingly broad implied definition and could be as simple as extending the data on the "low rates" verbiage.  So the debate not only contends with "when" but also "how much."