Market Comment
Mortgage bond prices finished the week higher pushing rates lower.Rates were actually higher the beginning of the week despite a lack of significant data or news.Rates bounced back lower Wednesday afternoon after the Fed “Beige Book” reported a slowly expanding economy with flat spending.News out of the euro zone continued to focus on Spain’s debt problems.The S&P downgraded Spanish debt to one notch above junk.Many analysts consider this a step closer to Spain requesting a formal bailout.Continued economic turmoil in the euro zone generally bodes well for lower U.S. rates as it reignites flight to quality buying of U.S. debt.Mortgage interest rates finished the week better by about 1/8 of a discount point.
LOOKING AHEAD
Economic Indicator
|
Release Date & Time
|
Consensus Estimate
|
Analysis
|
Retail Sales |
Monday, Oct. 15, 8:30 am, et
|
Up 0.7% |
Important.A measure of consumer demand.Weakness may lead to lower mortgage rates. |
Consumer Price Index |
Tuesday, Oct. 16, 8:30 am, et
|
Up 0.3%, Core up 0.1%
|
Important.A measure of inflation at the consumer level.Weaker figures may lead to lower rates. |
Industrial Production |
Tuesday, Oct. 16, 9:15 am, et
|
Up 0.4% |
Important.A measure of manufacturing sector strength.A lower than expected increase may lead to lower rates. |
Capacity Utilization |
Tuesday, Oct. 16, 9:15 am, et
|
77.9% |
Important.A figure above 85% is viewed as inflationary.Weaker figure may lead to lower rates. |
Housing Starts |
Wednesday, Oct. 17, 8:30 am, et
|
670k |
Important.A measure of housing sector strength.Weakness may lead to lower rates. |
Weekly Jobless Claims |
Thursday, Oct. 18, 8:30 am, et
|
342k |
Important.An indication of employment.Higher claims may result in lower rates. |
Philadelphia Fed Survey |
Thursday, Oct. 18, 10:00 am, et
|
1.2 |
Moderately important.A survey of business conditions in the Northeast.Weakness may lead to lower rates. |
Leading Economic Indicators |
Thursday, Oct. 18, 10:00 am, et
|
Up 0.1% |
Important.An indication of future economic activity.Weakness may lead to lower rates. |
Existing Home Sales |
Friday, Oct. 19, 10:00 am, et
|
4.84m |
Low importance.An indication of mortgage credit demand.Significant weakness may lead to lower rates. |
Business Inventories
The report on business inventories basically gives a broader look at the durable goods, factory orders, and retail sales reports. Not only is this report an important part of the investment component of the GDP, but it also provides additional evidence about the economy in the upcoming months. Changes in business inventories slow as the economy approaches a peak, and rise as the economy approaches the trough of a recession. Therefore the change in business inventories is a leading indicator of GDP. The data for this report, which are published by the Department of Commerce’s Census Bureau, comes from a monthly survey of inventories, orders, and manufacturers’ shipments, in addition to the merchant wholesalers and retail trade surveys.
In this environment every piece of data has the potential to cause some volatility.
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