Rates were a small bit lower for the most part today’s morning. The 10-year Treasury hovered around -.013% with the rate at 4.715%. The benchmark 10-year Treasury followed the stock and bond market from that point on. As stocks raised some, money moved out of bonds and into stocks. The 10-year Treasury closed +.016% with the rate at 4.804%.

There was no economic data out today.

This blog’s newest feature is the BoxGuess. The BoxGuess is a short-term technique to see if the range of expectations will be above or below the actual. The methodology is a secret and will not be made public.

Warning: The BoxGuess is theoretical at best. The author is using this blog to test the effectiveness of the BoxGuess. You can do the same. If you use this blog to test the effectiveness of the BoxGuess you do so at your own risk.

SHORT-TERM OUTLOOK [30 July 2007]

There was a trading range around the 5.100% level on the 10-year Treasury. The floor was around the psychological 5.000%. The ceiling was just above the Fed Funds rate at 5.250%. The recent high occurred on 12 June at 5.297%. That trading range was tested on 18 July 2007. The Trading Range was broken on 20 July with the 10-year Treasury closing -.076% with the rate at 4.952%.

A new trading range has emerged! We broke through the old won on 20 July and we seem to be heading towards a new floor. It is this blogs guess that the floor will be established around the 4.750% level.

That floor has been tested for the last few days. So far it has not broken through. If that floor is not broken in the next week it will take a major event to smash it.

This week may produce such an event, even though this week could establish a floor without any important numbers out.

Tuesday has a plethora of items with the potential to move the market. The market opens with the combination of Personal Income and Personal Spending. A portion of the spending half of this report is the Personal Consumption Expenditure (PCE). This is one of the most important indicators of inflation. Most important, it is the inflation gauge that the FED uses most. It is only forecast by a few analysts, but their guess is for a low0.1% to 0.2%.

Personal Income is forecast to be a high +0.5% to +0.6%. Spending is forecast to be a lower +0.1% to +0.2%. That would be good if Income were that much higher than Spending.

The quarterly Employment Cost Index is very important to bonds. It is predicted to be +0.9% to +1.0%.

Chicago PMI is anticipated to be 58.0 to 59.5.

Construction Spending is anticipated at -0.1% to +0.3%.

Consumer Confidence is looking for a 105 to 109 reading.

All of these are due by 09:00cdt {14:00gmt}. So we should have a busy first few hours.

Wednesday, August 1, 2007

7:00a.m. MBA Mortgage Refinancing Index. Previous: -1.4%.

7:30a.m. July Challenger Layoffs. Previous: -21.6%.

8:15a.m. Non-Farm Payrolls Forecast. Previous: +132K.

9:00a.m. Tsy Refunding Announcement.

10:00a.m. June Pending Home Sales. Previous: -3.5%.

10:00a.m. July ISM Manufacturing Business Index.. Previous: 56.0.

Thursday, August 2, 2007

8:30a.m. Initial Jobless Claims.. Previous: -2K.

10:00 a.m. DJ-BTMU Business Barometer. Previous: -1.1%.

10:00a.m. June Factory Orders. Previous: -0.5%.

Friday, August 3, 2007

This is a very big day as it contains the Employment Situation Report including

8:30a.m. July Nonfarm Payrolls.. Previous: +132K.

8:30a.m. July Unemployment Rate. Previous: +4.5%.

8:30a.m. July Hourly Earnings.. Previous: +0.3%.

8:30a.m. July Average Workweek.. Previous: +33.9 hours.

10:00a.m. July ISM Non-Manufacturing Business Index.

Steve Boxmeyer [612] 799 – 6858

steve@LendWithIntegrity.com