Weekly Mortgage Overview: 10/21/2013

By October 21, 2013Uncategorized

This is a huge week for economic data with several of the major economic reports that were held up due to the shutdown hitting the wires this week.

The biggest focus this week will be on Tuesday’s Non-Farm Payroll (NFP) release and Friday’s Durable Goods Orders. The NFP report has taken a very important role in the marketplace as bond traders have been using it as a proxy to determine when the Federal Reserve is likely to begin to taper their monthly MBS and Treasury purchases. Ultimately, when the Fed does begin to taper, mortgage rates will rise.

However, now the market believes that regardless of how strong or weak the NFP readings are, the Fed is forced to stand pat on their massive bond purchase program until March or June of next year. This is due to the fact that the debt ceiling will be renegotiated once again in February and the first Fed meeting after that new negotiation will be in March. Since that will be only a month after the new deal, the economy won’t have an opportunity to adjust by the March Fed meeting. Plus, if Congress just kicks the can down the road again in February with another short term extension, the Fed will have to keep their bond purchase program going. This means that rates are likely to remain in a relatively low range for several months. 

Releases will be out for both Existing Home Sales (today) and New Home Sales (Thursday), which will give a good pulse on the housing market this week.

There are three U.S. Treasury auctions all on the same day, October 24th: 2, 5, and 7-year Notes.

What is on the agenda for this week?

Date

Time (ET)

Economic Release

Market Expects

Prior

21-Oct

10:00 AM

Existing Home Sales

5.30M

5.48M

21-Oct

10:30 AM

Crude Inventories

NA

6.807M

22-Oct

8:30 AM

Nonfarm Payrolls

183K

169K

22-Oct

8:30 AM

Nonfarm Private Payrolls

183K

152K

22-Oct

8:30 AM

Unemployment Rate

7.30%

7.30%

22-Oct

8:30 AM

Hourly Earnings

0.20%

0.20%

22-Oct

8:30 AM

Average Workweek

34.5

34.5

22-Oct

10:30 AM

Natural Gas Inventories

NA

90 bcf

23-Oct

7:00 AM

MBA Mortgage Index

NA

0.30%

23-Oct

8:30 AM

Export Prices ex-ag.

NA

-0.10%

23-Oct

8:30 AM

Import Prices ex-oil

NA

-0.20%

23-Oct

9:00 AM

FHFA Housing Price Index

NA

1.00%

23-Oct

10:30 AM

Crude Inventories

NA

NA

24-Oct

8:30 AM

Initial Claims

341K

358K

24-Oct

8:30 AM

Continuing Claims

2860K

2859K

24-Oct

10:00 AM

JOLTS – Job Openings

NA

3.689M

24-Oct

10:00 AM

New Home Sales

432K

421K

24-Oct

10:00 AM

JOLTS – Job Openings

NA

3.689M

24-Oct

10:30 AM

Natural Gas Inventories

NA

NA

25-Oct

8:30 AM

Durable Orders

3.50%

0.10%

25-Oct

8:30 AM

Durable Goods -ex transportation

0.30%

-0.10%

25-Oct

9:55 AM

Michigan Sentiment – Final

74.5

75.2