This week is full of economic data that can and has moved the markets.
-Existing home sales, economists expecting 4.45m
-Leading indicators, economists expecting a -0.1% reading. This report is composed of 10 indicators which are designed to forecast the strength of the economy 6 to 9 months in the future. A weaker economy generally leads to less inflation which leads to lower mortgage rates.
-Consumer Confidence, economists expecting a 38.0 reading. A weaker number show that consumers have less confidence, thus they are less likely to spend money which is a bad sign for the economy.
-Fedederal Open Market Committee Meeting. At this meeting, the Fed decides on their interest rate policy.
-Durable orders, economists expecting a decline of -1.5%. This reports the number of new orders placed with manufacturers for immediate and future delivery of goods and items that are considered to be useful for at least 3 years such as vehicles, computers, appliances, etc.. This report provides insight into business investment. A lower number is considered mortgage friendly.
-Jobless claims, economists expecting 580k after last weeks 589k
-New home sales, economists expecting 410k after last months 407k
-Advance GDP, economists expecting -5.0%. GDP represents the total value of the country's production during the period and consists of the purchases of domestically-produced goods and services by individuals, businesses, foreigners and government entities.
-Chicago PMI, economists expecting 33.0 This report is a survey that shows the strength of the manufacturing segment of our economy in the Chicago area.
-Consumer sentiment, economists expecting 62.0.
The biggest impacting reports are released on Thursday and Friday with durable orders, advance GDP and Chicago PMI being the highest impacting reports. So far this morning, mortgage backed securities are continuing their sideways movement. We are holding steady with going out levels on Friday. As I stated Friday, MBS will probably follow treasuries and they did rather nicely. Both MBS and treasuries sold off early to rebound later in the day with treasuries moving much more the MBS.