Expect a Rally

Markets, whether they are equity, bond, or futures focused are most successful when risks are removed from the marketplace. We witnessed that over the weekend with Fannie and Freddie moving into conservatorship. This weeks economic numbers may fall on deaf ears as markets should rally throughout the week with all of the liquidity currently sitting idle being moving into action.

Release Date & Time
Economic Indicator
Consensus Estimate
Analysis

Mon. Sept. 8
Fannie and Freddie will dominate mortgage trading. Expect to see sizeble gains with the FMN 4.5, 5.0 5.5, 6.0, 6.5 for both Fannie and Ginnie instruments.

Tue. Sept. 9, 10:00 a.m. ET
July Wholesale Inventories
+0.7% vs. last +1.1%
This bit of old, stale macro-economic data will likely do nothing more than take up space on this week’s calendar. Expect a continued rally with Fannie and Ginnie instruments.

Tue. Sept. 9,
Most mortgage-backed securities “roll” to October delivery
This is a standard monthly administrative function of the mortgage market. The impact of this event is already reflected on most investors’ rate sheets.

Wed. Sept. 10,
Thurs. Sept. 11, 8:30 a.m. ET
Initial jobless claims for the week ended 9/6
Down 4,000
This report will likely have little, if any impact on direction of mortgage interest rates today.

Thurs. Sept. 11, 1:00 p.m. ET
Treasury auctions estimated $11 bil. 10-year notes.

Fri. Sept. 12, 8:30 a.m. ET
Aug. Retail Sales
Ex. Auto
+0.2% vs. last -0.1%
-0.2% vs. last +0.4%
Major incentives from auto manufacturers and sharp discounting from retailers likely combined to nudge headline retail sales higher last month. Slumping labor market conditions and high energy costs probably took a toll on the ex. auto component of this data set. If my assessment proves correct, this report will have little, if any impact on the direction of mortgage interest rates today.

Fri. Sept. 12, 8:30 a.m. ET
Aug. Producer Price Index
Core Rate
-0.5% vs. last +1.2%
+0.2% vs. last +0.7%
Energy and other commodities fell sharply during the month. Few doubt headline and core inflation (a value that excludes the volatile food and energy components) at the producer level remained benign in August.

Mon. Sept. 15, 9:15 a.m. ET
Aug. Industrial Production &
Capacity Utilization
-0.2% vs. last +0.2%
79.7 vs. last 79.9
The modest expected decline in both elements of this data set will likely have little if any impact on the direction of mortgage interest rates today.

As a partner of mine often says, Be Well.