Round 4

I used this title because while I have been a supporter of the aggressive Fed action over the past several weeks, I believe we are early in this lengthy three sided fight with capital restrictions, the economy as a whole and inflation. This is a light week for economic news. I'll keep this report light as my follow up report is already looking lengthy.


Release Date & Time
Economic Indicator
Consensus Estimate
Analysis

Mon. Oct. 20, 10:00 a.m. ET
Sept. Leading Indicators
-0.3% vs. last -0.3%
This second tier economic report will likely draw little investor attention and should not be a factor in terms of the trend trajectory of mortgage interest rates.

Mon. Oct. 20, 10:00 a.m. ET
Fed Chairman Bernanke testifies before the House Budget Committee
This will be the “wild card” event of the week. Mr. Bernanke will provide prepared text testimony on the economic outlook and financial markets. It is highly unlikely this proceeding will include anything mortgage market moving – but you never know until you know. Heads up.

Tue, Oct. 21
Nothing posting today

Wed. Oct. 22
Thurs. Oct. 23, 8:30 a.m. ET
Initial jobless claims for the week ended 10/18
Up 9,000
The expected weakness in this data set takes on added importance because it coincides with the survey period for the more important October nonfarm payroll number. If the consensus estimate proves accurate, rising jobless claims will almost certainly be viewed by investors as supportive of steady to fractionally lower mortgage interest rates.

Fri. Oct. 24, 10:00 a.m. ET
Sept. Existing Home Sales
Up 0.2%
Investors have already priced in expectations that existing home sales will be puny in September. In the unlikely event the pace of existing home sales posted a gain of 1.1% or more last month – look for mortgage interest rates to edge higher. On the other hand, a September sales pace of 1.0% or lower will tend to be supportive of steady to fractionally lower mortgage interest rates.

Mon. Oct. 27
Sept. New Home Sales
Down 2.1%
No one doubts new home sales remain in a slump – the only question involves the depth of the slump. Mortgage investors will probably give news that new home sales fell by 2.0% or more in September little more than a passing glance. A sales gain of 0.5% or more will likely put some upward pressure on mortgage interest rates. For what it is worth, I think there is a better chance that you’ll find a multi-million dollar winning lottery ticket stuck under you windshield wiper this morning than there is that new home sales posted a huge gain in September.