This is another very big week for economic data.
We get a double dose of Factory Orders this morning with both the August and September releases. But the two biggest reports this week will be GDP and Non-Farm Payrolls.
Third Quarter GDP will be released on Thursday. The market is expecting growth around 2.0% which is slower than the prior reading of 2.5%. If the number is below 2.0%, MBS will rally. If the reading is above 2.15%, then MBS will sell off.
Non-Farm Payrolls will be released on Friday. The market is expecting a very low reading of 130K, which is a pull back from the prior reading of 148K. If you recall, that 148K was a big miss from the consensus estimates of 180K at that time. This reading has the potential to set our next trading channel. If we get a reading of 125K or below, expect MBS to rally and crawl back up to the trading channel that we had two weeks ago (better pricing). But, if we get a reading above 145K, then MBS will sell off and we will break through our 25 day moving average and trade in a new and lower channel (worse pricing).
There are no major Treasury auctions today.
There is a wider range in BPS this week compared to last week and we may see some more defined pricing swings as a result. Ultimately it will depend on GDP and Non-Farm Payrolls if we are going to see any type of meaningful rally.
What is on the agenda for this week?
|
Date |
Time (ET) |
Economic Release |
Market Expects |
Prior |
|
4-Nov |
10:00 AM |
Factory Orders |
0.30% |
-2.40% |
|
4-Nov |
10:00 AM |
Factory Orders |
1.80% |
NA |
|
5-Nov |
10:00 AM |
ISM Services |
54 |
54.4 |
|
6-Nov |
7:00 AM |
MBA Mortgage Index |
NA |
6.40% |
|
6-Nov |
10:00 AM |
Leading Indicators |
0.60% |
0.70% |
|
6-Nov |
10:30 AM |
Crude Inventories |
NA |
4.087 |
|
7-Nov |
7:30 AM |
Challenger Job Cuts |
NA |
19.10% |
|
7-Nov |
8:30 AM |
Initial Claims |
335K |
340K |
|
7-Nov |
8:30 AM |
Continuing Claims |
2863K |
2881K |
|
7-Nov |
8:30 AM |
GDP-Adv. |
1.90% |
2.50% |
|
7-Nov |
8:30 AM |
Chain Deflator-Adv. |
1.40% |
0.60% |
|
7-Nov |
10:30 AM |
Natural Gas Inventories |
NA |
38 bcf |
|
7-Nov |
3:00 PM |
Consumer Credit |
$11.0B |
$13.6B |
|
8-Nov |
8:30 AM |
Nonfarm Payrolls |
100K |
148K |
|
8-Nov |
8:30 AM |
Nonfarm Private Payrolls |
110K |
126K |
|
8-Nov |
8:30 AM |
Unemployment Rate |
7.30% |
7.20% |
|
8-Nov |
8:30 AM |
Hourly Earnings |
0.20% |
0.10% |
|
8-Nov |
8:30 AM |
Average Workweek |
34.4 |
34.5 |
|
8-Nov |
8:30 AM |
Personal Income |
0.20% |
0.40% |
|
8-Nov |
8:30 AM |
Personal Spending |
0.20% |
0.30% |
|
8-Nov |
8:30 AM |
PCE Prices – Core |
0.10% |
0.20% |
|
8-Nov |
9:55 AM |
Mich Sentiment |
75.3 |
73.2 |
|
8-Nov |
10:00 AM |
JOLTS – Job Openings |
NA |
3.883M |