Twin releases at 8:30 am EST will help set the tone on Thursday, as markets will receive the latest employment and inflation data. Before those releases, markets look set to open lower as oil prices have slipped in the overnight, due to an IEA forecast predicting oil consumption would fall by its fastest rate since 1981 this year. Meanwhile, the U.S. government continues to speak of increased regulation in the financial sector, this time with a nod to over-the-counter derivatives trading.
The Jobless Claims release is expected to show 610,000 Americans filed for unemployment benefits last week. In the prior report, claims fell 35k to 601k, marking the lowest level in 14 weeks. It could be significant if claims fall below the psychologically-significant 600k level.
Continuing claims ― the total number of people receiving jobless benefits ― currently sits at an all-time high with 6.351 million people. Until the economy truly turns around, that number isn’t expected to fall much and will likely rise in this report.
The other 8:30 am release is the Producer Price Index, which will receive less attention than usual as the more important Consumer Price Index comes out tomorrow. PPI is expected to advance 0.2% in April, while the core index ― which excludes volatile energy and food components ― is set to gain 0.1% in the month.
Outside of data news, the Financial Times says a surge in refinancing is “creating a boom in the home lending business, prompting banks to hire thousands of new employees and put them to work on extra shifts to process mountains of paperwork.”
Speaking on Wednesday, Treasury Secretary Tim Geithner said the “historic lows” in 30-year mortgage rates was one of many factors helping to increase lending and stabilize the financial system.
The Mortgage Bankers Association estimates that as much as $2,780 billion of new loans could me made this year. In the latest mortgage loan applications index, 72% of new loans were refinance-related.
The FT notes that BofA chief executive Ken Lewis said on Monday his bank was adding 6,000 workers to beef up its mortgage capabilities. Loan origination is at its highest level since 2003, but paperwork is more complicated now than in the housing boom just prior to the credit crunch.