This Week: its still all about what is occurring in Europe with the bank and sovereign debt problems, Treasury auctions and on Friday the opening of the annual Jackson Hole conference where markets are expecting something from Fed chief Bernanke on what, if anything the Fed can do to rev up the economy----not much in our opinion. There are only a couple of economic releases to consider; July new home sales and the second look at Q2 GDP. Treasury will start Tuesday with $35B of 2 yr notes, Wednesday $35B of 5 yr notes and Thursday $29B of 7 yr notes. The bond and mortgage markets will continue to focus attention on how the stock market trades; stocks up, rates increase, stocks down rates fall-----all in a narrow range. Lenders still have issues with locks they bought; how many will close? Prices for mortgages set by lenders will continue to be conservative. Look for continued volatility in stocks and bonds this week.
TBWS
