"Markets will want to see how much demand there will be for Treasuries at these yields," said Paul Mendelson, chief investment strategist from Windham Financial services.

U.S. nonfarm productivity is expected to show a rise of 1.5% following a 1.9% rise in the fourth quarter of 2007.

Economists from Desjardins said in a note to clients that although the data will be positive, it will be important to look at the components. They added the increase won't necessarily be because of more productivity, but because of a weaker labour market.

"We once again expect slight growth by productivity, given how weak economic growth was in the winter of 2008," said Desjardins. "The expected 1.1% gain will in fact primarily come from a substantial drop in hours worked, given the many job losses recorded in the first few months of the year."

For pending home sales, economists are forecasting more weak data with a 1.0% decline following February's fall of 1.9%.

With oil prices hitting record highs on a daily basis, markets will pay attention to weekly DOE crude oil inventories. According to a Platts survey, crude oil is expected to show a build of 1,500,000 barrels, gasoline inventories to decline 500,000 barrels, distillates are expected to increase by 1,300,000 barrels and refinery utilization will tick up 0.5%.

As for Fed speakers, Fed Governor Randall Kroszner will be in Cincinnati to speak about foreclosures.

All times in EDT.

Wednesday:

7:00 US MBA Mortgage Applications 2-May Prior: -11.1%

8:30 US Nonfarm Productivity 1Q Preliminary Exp: +1.5% Prior: +1.9%

8:30 CA Grain Stocks Report as of March 31

8:30 US Unit Labor Costs 1Q Preliminary Exp: +2.6% Prior: +2.6%

8:45 US Fed Governor Kroszner Speaks in Cincinnati on Foreclosures

10:00 US Pending Home Sales (Monthly) March Exp: -1.0% Prior: -1.9%

10:30 US DOE U.S. Crude Oil Inventories 2-May Exp: +1500K Prior: +3848K

10:30 US DOE U.S. Gasoline Inventories 2-May Exp: -500K Prior: -1483

10:30 US DOE U.S. Distillate Inventory 2-May Exp: +1300K Prior: +1129

10:30 US DOE U.S. Refinery Utilization 2-May Exp: +0.5% Prior: -0.22%

12:00 CA BOC Nominal Bond Auction

12:20 CA BOC Repurchase Operation

13:00 US Treasury to Sell $15B 10-Year Notes

15:00 US Consumer Credit March Exp: $6.0B Prior: $5.2B

By Neils Christensen, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it