The upcoming week is full with economic reports, with the biggest impacting reports coming on Friday.
- Construction Spending, economists expecting a -1.2% drop after last months -1.2%.
- Factory Orders, economists expecting a -2.6% drop after last months -5.1%.
- Pending Home Sales Index, which is expected to show a slight decline from last month.
- ISM Services Index, economist expecting a 37.0 after last months 37.3.
- FOMC Minutes, this is the minutes of the last Fed meeting.
- Jobless claims, economists expecting 550k, after last weeks 492k
- Unemployment rate, economists expecting 7.0% after last months 6.7%
- Nonfarm Payrolls, economists expecting -475k, after last months -533k
Last week, mortgage backed securities sold off to end the week down. We are still waiting for the Fed to step in and start buying mbs, but even at the current levels, lenders rate sheets should look better. Lower rates are ahead, just a matter of time before lenders start to pass along the lower rates. So far this morning, mbs have continued downward, no real cause for the selling. Currently Dow Futures are down, European markets are relatively unchanged, oil is slightly lower along with Gold. We should see higher volume of trades today as most investors will be back at work, but way to early to give a opinion on the movement or direction. Once we receive the Construction Spending report at 10am eastern and the Dow will be open, I will post back with an update. As I am wrapping up this short post, mbs have rebounded off the lows and are currently up 1 tick from official close which is 3pm eastern. For readers who think mortgage rates follow the 10 yr Treasury note, today should be a good lesson for you. The 10 year is getting beat up already this morning, down almost a full point. This selling pressure in Treasuries is pulling mbs with them as birds of a feather flock together. Meaning, mbs and treasuries are both fixed income investments and do trend in the same direction, but mbs are what determine mortgage rates and not Treasuries.