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.

 

Maine Mortgage Market Update 10.27.2010

Mortgage bond prices opened lower Wednesday morning addling to the losses seen Tuesday afternoon. Rates are under pressure from strong economic data released this morning.

In news released at the open, orders for durable goods rose 3.3%. Traders were expecting orders to rise 1.8%. That data was sharply higher than expectations and not bond friendly.

Traders are now waiting for stocks to begin trade at 9:30 am ET and for the release of new home sales data set for 10:00 am ET. Also, this afternoon the Treasury will auction $35B in 5-year notes with results by 1:15 pm ET.

Why are rates under pressure? It comes from a variety of things including; what will happen during the election next Tuesday, what will the Fed do next Thursday, is inflation going to creep back or skyrocket and what is going with the economy and housing markets. Bond traders hate uncertainty and will take their money off the table when they get nervous.

Contact your Portland, Maine Mortgage Broker today for more info.

Maine Mortgage Market News – 10.20.2010

Mortgage bond prices opened negative this morning erasing some of the gains from yesterday afternoon. We rallied yesterday following significant stock weakness. The DOW closed down 165 points.

Stock futures point to a positive open later this morning. We will see how things progress. If stocks rebound we could see further weakness on the day.

We have Fed Beige Book data this afternoon. No need to panic but still has the potential to move the markets.