A Look ahead at events that can effect Mortgage bond prices 11.01 to 11.05

The Fed meeting this week will be the most important release.  While no rate change is expected the wording of the statement will be carefully scrutinized.

LOOKING AHEAD 11.01 to 11.05

Economic
Indicator
Release
Date & Time
Consensus
Estimate

Analysis
Personal Income and Outlays Monday, Nov. 1,
8:30 am, et
Up 0.3%,
Up 0.4%
Important.  A measure of consumers’ ability to spend.  Weakness may lead to lower mortgage rates.
PCE Core Inflation Monday, Nov. 1,
8:30 am, et
Up 0.1% Important.  A measure of price increases for all domestic personal consumption. Weakness may help rates.
ISM Index Monday, Nov. 1,
10:00 am, et
53.6 Important.  A measure of manufacturer sentiment.  Weakness may lead to lower mortgage rates.
ADP Employment Wednesday, Nov. 3,
8:30 am, et
25k Important.  An indication of employment.  Weakness may bring lower rates.
Factory Orders Wednesday, Nov. 3,
10:00 am, et
Up 0.6% Important.  A measure of manufacturing sector strength.  Weakness may lead to lower rates.
Fed Meeting Adjourns Wednesday, Nov. 3,
2:15 pm, et
No rate change Important.  Few expect the Fed to raise rates, but some volatility may surround the adjournment of this meeting.
Preliminary Q3 Productivity Thursday, Nov. 4,
8:30 am, et
Up 0.6% Important.  A measure of output per hour.  Improvement may lead to lower mortgage rates.
Employment Friday, Nov. 5,
8:30 am, et
9.6%,
Payrolls +45k
Very important.  An increase in unemployment or weakness in payrolls may bring lower rates.

Why Data is Important

One of the easiest and most important things to do when making a decision whether to float or lock a loan is knowing what data is going to be released.  Economic releases are important because they provide a snapshot of a portion of the economy.  Data is even more important in that it is often the cause of market volatility.  Upcoming data events are readily available and there is no excuse not knowing what data will be released in the week ahead.

While an in depth understanding of an economic event can help a person make informed decisions, it is more important to have a rudimentary understanding of when an important piece of data will be released and what basic effect that data can have on the market.    Understanding the nuances of a release does very little for a person if they are blindsided by not knowing when the release will occur.  Accurately predicting how each and every release will come in is impossible.

Floating into important economic data can be very risky and can expose a person to huge market swings.  Keep that in mind this week, as there is an abundance of significant data heading our way. The combo of a Fed meeting and the employment report in the same week is not common.

 

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