What Happened Last Week?
Bonds Leading Off in a Friendly Direction
With ISM Manufacturing, Friday brought the only other reasonably important economic report of the week after Thursday’s PCE data, and it did not disappoint. Well, actually, it did disappoint anyone hoping to see strength and resilience in the sector which is why it did not disappoint those hoping to see lower rates. Not only did the headline dip well into contractionary territory, but the employment gauge was the 2nd lowest since breaking out of the covid lockdown period in mid 2020. Timing matters with the big jobs report looming this Friday. Prices also decelerated slightly. With that, bonds surged to the best levels in more than two weeks, effectively taking a lead-off before confirming a friendly range breakout. Caveat: that confirmation requires this week’s data to avoid crushing expectations.
Source: Matthew Graham, Mortgage News Daily 3/1/2024)
What’s on the Agenda for this Week?
Three Things
The three areas that have the greatest ability to impact your MBS pricing this week are: (1) The Talking Fed, (2) Central Bank Palooza and (3) Jobs, Jobs, Jobs.
(1) The Talking Fed: This is the last week of Talking Feds prior to next week’s media blackout period leading into the next FOMC meeting. The main focus this week will be Fed Chair Powell’s semi-annual testimony on Wednesday and Thursday.
- 03/05: Barr
- 03/06: Daly, Kashkari, Powell testimony and the Fed’s Beige Book
- 03/07: Mester, Powell testimony
(2) Central Bank Palooza: Key interest rate decisions will be issued out of the Bank of Canada and the European Central Bank.
(3) Jobs, Jobs, Jobs: Big Jobs Friday is this week along with a ton of job and wage related data all week long: ADP Payrolls, ISM Employment Index, JOLTS, Challenger Job Cuts, Initial Weekly Jobless Claims, Unit Labor Costs, Non Farm Payrolls, Average Hourly Earnings, Unemployment Rate, U6 Underemployment Rate, Laborforce Participation Rate, Average Weekly Hours.