3 numbers to watch: Spanish bond auctions, ECB, ISM Non-manuf.

Spain returns to the (auction) ring to fight off bond vigilantes as the beleaguered country prepares to sell 3- and 5-year bonds. France joins the fray as well with auctions for maturities ranging from 5- to 13-years. If that's not enough, the ECB's monthly rate meeting and in particular President Draghi's press conference are also up for grabs, as is the US ISM Non-manufacturing report*. Will all this going on today, we could well see plenty of action rather than the usual quiet 'pre-Nonfarm' Thursday.

• Spanish (08:30 GMT), French (09:00) bond auctions to show rising yields? The Spanish 10-year government bond yield has rallied to 5.8%, having broken the 6% threshold several times in April despite some improvement in the first quarter of the year when the ECB's 3-year LTROs worked their way through the system. The troubled nation will attempt to auction off 3- and 5-year bonds again today after the last such auctions (in early April and February, respectively) saw the average yields land at 2.89% and 3.565% with bid-to-cover ratios of 2.41 and 2.70. The 3- and 5-year bonds currently trade at 4.01% and 4.7%. Half an hour later France will be in the limelight with its own auctions, which include a 10-year bond with a 3% coupon. The 10-year currently trades just below that rate.

• ECB rate announcement (11:45), press conference (12:30) to show a more dovish central bank? The LTROs, which were quickly - too quickly? - deemed a success by Mario Draghi, are not yet back on the table, but with the Spanish 10-year trading close to 6%, fading inflationary pressures (even if only slowly) and a weak economy symbolised by poor PMIs, the question of a third round of 3-year LTROs or a rate cut could well be presented to Draghi at the monthly press conference 45 minutes after the rate announcement (the rate is not expected to change from its current 1%). Clearly, the hurdle to overcome is the Bundesbank, which remains keen to fulfill its role as the Eurozone's (only) fiscal policeman now that question marks are being raised over France's commitment to cost cutting as Hollande inches closer to an Election win on Sunday.
• Apr. US ISM Non-manufacturing (14:00) to inch lower: Tuesday's ISM Manufacturing report put in an impressive display despite the recent string of falling regional Fed activity indicators, alleviating to some degree the concerns of 'seasonal payback'. Consensus, however, does not expect a repeat performance today when the ISM Non-manufacturing report is released. The ISM Non-manufacturing Index, which covers a much large share of the US economy, is seen inching down to 55.4 in April from 56, though we note that this is still consistent with growth around 3 percent q/q annnualised. The March report saw new orders decline to (a still high) 58.8 from 61.2 while activity fell 3.7 points to 58.9. Inventory, which is not seasonally adjusted, rose to 54 from 53.5.

* Not to mention UK Nationwide House Prices (06:00 GMT), Eurozone PPI (09:00) and US Initial Jobless Claims (12:30).

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