Posted by: cfigueira | October 7, 2010

Mortgage News

Key Economic News:

The day starts – indeed, has already syarted – with more data on the job market, listen to a couple of Fed speeches, and wind up with consumer credit and the Fed’s balance sheet.

8:30: Unemployment insurance claims…still range-bound? Nobody expects much of a change in either initial or continuing claims for regular programs, as the labor market appears to have softened. We continue to focus on the total number of recipients on all programs. It has come down in recent weeks, though most of this appears to be due to the exhaustion of eligibility for the 99 weeks now provided rather than people finding work.
For initial claims, median forecast (of 47): 455k, ranging from 440k to 470k; last 453k.
For continuing claims, median forecast (of 15): 4.45mm, ranging from 4.42mm to 4.5mm; last 4.457mm.

13:20: Dallas Fed President Richard Fisher speaks on current economic conditions…to the Economic Club of Minnesota. He will almost certainly offer dofferent view thaan those recently expressed by President William Dudley and Charles Evans of New York and Chicago, repectively. Fisher moves onto the voting rotation of the FOMC in 2011.

13:30: Kansas City Federal Reserve President Thomas Hoenig speaks at an economic forum…and while Fisher’s take on the current situation and what the Fed should do about it my be hard to predict, it is likely that Mr. Hoenig will offer some counterarguments to the recent statements by Messrs. Dudley and Evans. Mr Hoenig is a voting member of the FOMC in 2010 and has dissented at each of the six meetings thus far.

15:00: Consumer credit for Aug…more declines? Outstanding balances have dropped almost continuosly since September 2008, interrupted only twice (both times in January) by very small upticks. Some of this is write-downs; some in paydowns. Most economists think the trend continued in August.
Median forecast (of 39): -$3.5bn, ranging from -$7.5bn to +$1.8bn; last -$3.6bn.

16:30: ederal Reserve balance sheeet…The size of the Fed’s balance sheet remains around $2.3 trillion as repayments of principal on agency and MBS is now being reinvested into US Treasuries. This shift will show up slowly over time, as the amounts per week are in the $3-$4bn neighborhood.

Advice:

Mixed results as Initial filings decline but total Claimants rise
Data on initial marginally better than expected, though still within established range. Continuing claims fall from upward-revised level. Recipients of emergency/extended benefits rise about 255k, reversing most of the preceding week’s decline. These mixed results have no implications for tomorrow’s payroll forecasts (+25k for private/-50k for total nonfarm/+0.1pt on the jobless rate, to 9.7%).

Key Numbers
Initial claims -11k to 445k in week ended Oct 2 vs. median forecast 455k.
Continuing claims -48k to 4.462 million in week ended Sept 25 vs. median forecast 4.45 million.
Recipients of emergency/extended benefits rise 255k (NSA) in week ended Sept 18.

Cautious float short term, float long term.

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