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| | Market Comment
Mortgage bond prices finished last week lower pushing mortgage interest rates considerably higher. The Federal bailout plan along with an unexpected Fed rate cut dominated almost all headlines as uncertainty loomed and the liquidity crisis continued. Fear gripped the markets, which caused many investors to exit stocks and bonds to head for cash positions. Trading in the financial markets was extremely volatile. The only bright light appeared to be a precipitous decline in oil prices. For the week, interest rates on government and conventional loans rose by over a full discount point. The consumer price index Thursday will be the most important data release this week. The financial markets remain volatile as traders digest the bailout developments. Expect the up and down trading pattern to continue. LOOKING AHEAD Economic
Indicator | Release
Date & Time | Consensus
Estimate |
Analysis
| | Columbus Holiday | Monday, Oct. 13 | None | Important. Shortened trading week may lead to market volatility when trading resumes Tuesday. | | Producer Price Index | Wednesday, Oct. 15,
8:30 am, et | Down 0.3%,
Core up 0.2% | Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates. | | Retail Sales | Wednesday, Oct. 15,
8:30 am, et | Down 0.4% | Important. A measure of consumer demand. Weakness may lead to lower mortgage rates. | | Fed "Beige Book" | Wednesday, Oct. 15,
2:00 pm, et | None | Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates. | | Consumer Price Index | Thursday, Oct. 16,
8:30 am, et | Up 0.1%,
Core up 0.2% | Important. A measure of inflation at the consumer level. Lower figures may lead to lower rates. | | Industrial Production | Thursday, Oct. 16,
9:15 am, et | Down 0.8% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. | | Capacity Utilization | Thursday, Oct. 16,
9:15 am, et | 78.0% | Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. | | Philadelphia Fed Survey | Thursday, Oct. 16,
10:00 am, et | Down 5.0 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. | | Housing Starts | Friday, Oct. 17,
8:30 am, et | Down 1.7% | Important. A measure of housing sector strength. Larger than expected decreases may lead to lower rates. | | U of Michigan Consumer Sentiment | Friday, Oct. 17,
10:00 am, et | 69.0 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Fundamental Week |
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