Today's economic docket consists of Durable Goods numbers (if the Paris Air Show was indeed as bad as we expect, Boeing, i.e., aircraft, orders may slip substantially), the Beige Book, and $35 billion in 5 Year Notes (+$20.065 net). All of it irrelevant: the double whammy of major headline risk out of both Europe and the US (Europe bailout 2 unwinding, no deal 24 hours ahead of the Thursday congressional deadline) will be the key driver of the market once again.
8:30: Durable goods orders (June): A soft report? Goldman forecasts that durable goods orders declined by 1% in June. Although most of the expected decline is due to a drop in aircraft orders, sluggish activity in the second quarter suggests that core capital goods orders (nondefense capital goods excluding civilian aircraft) should also be weak. However, the possibility of a boost from the “last month of the quarter” bias that we have noticed for this indicator points to upside risk to the forecast.
GS: -1.0%; median forecast: -0.3%; Last: 2.1%.
11:30: Treasury will auction a $12.0 billion 5-day CMB to raise all new cash.
13:00: Treasury will auction a $35.0 billion 5-year note to raise $20.065 billion.
14:00: Federal Reserve’s Beige Book. The Beige Book is likely to reflect that economic activity continued to expand at a sluggish rate between early June and July (the period covered by the report). The anecdotal information in the latest Beige Book may provide useful information on any remaining supply chain disruptions in the auto industry and any signs whether hiring has picked up following June’s disappointing jobs report.