This week we have a huge amount of economic data that will hit this week due to several reports hitting that were postponed due to the government shutdown.
We will have a good read on the consumer with Retail Sales, Consumer Confidence and Auto Sales. A good read on manufacturing with Chicago PMI and ISM Manufacturing. We will also get more data on the jobs front with ADP Private Payrolls and Initial Jobless Claims. On the Housing front we will get Pending Home Sales and the Case-Shiller Home Price Index. And on the inflationary front we get PPI and CPI.
So, as you can see we will get data on just about every sector of our economy this week. Of course, the focus will naturally be on Wednesday's FOMC interest rate decision and policy statement. However, most traders and economists do not expect the FOMC to make any changes to their policies or their time tables.
This week will see a large amount of economic data releases that were postponed due to the government shutdown. While we will likely end the week very close to where we started it in both MBS pricing and interest rates, expect volatility along the way as we see the release of all of these reports. We do expect rates to stay overall neutral because all expectations are that the Fed can't even begin talk of tapering
We will once again be “channel bound” in the exact same trading channel that we say Thursday and Friday and will see sideways movement in pricing. Even if we get low inflationary readings with CPI and PPI and weaker economic data with Retail Sales, it is difficult to see bonds trading above our new resistance level that held all of last week.
We've settled right in the middle of our new trading range, and there isn't a lot of pending economic data today that should really move us. It's probable that we see a pretty tame trading day today, with very little volatility that would cause any concern for lender repricing for the worse. It's also not likely that we see any real rate improvements today either.
There is risk to floating right now, but be prepared to act quickly with your Mortgage Loan Professional to stay a step ahead of lender reprices and market trends to protect your mortgage rate. Be sure to communicate with your Mortgage Loan Professional to stay abreast of any unforeseen movements that might cause concern though. Remember that the mortgage professional who has provided you with this report today is also monitoring the MBS market in real time and is your best resource to stay ahead of lender's pricing reactions to the market.
- Michael Corboy
www.specialtyfinancialmtg.com
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