The week just passed was horribly epic–fraught with significant
economic data (both at home and abroad), important Treasury auctions, an
FOMC Announcement, and a final confirmation on Greece’s bailout, just
to name a few. And let’s not forget the purely technical developments
that added to, and confirmed the sense that something very major was
happening, namely, the release of the stored energy from months of
interest rate repression.
Here’s how it looked for MBS:
and for Treasuries:
such a move, history suggests the average trading range will be wider
over the next two weeks than it has been. Whether or not that turns out
to be true with the current breakout isn’t yet clear. Even if we do
see a higher-than-normal amount of volatility this week, it doesn’t look
like it will be motivated by a particularly active data calendar,
especially not in the same way last week was.
There’s hardly any
meaningful data this week. The little that exists is comprised mainly
of the relatively inconsequential housing market series beginning today
with the NAHB Housing at Market Index at 10am, which is seen rising from
29 in the previous month to 30 in today’s report. Even if it misses
appreciably, we’re not expecting major impact on trading levels. More
interesting by far will be Fed-Speak from FOMC Voter Dudley at 8:35am
and again at 1:40pm. In the interim, we’ll get scheduled Fed Twist
buying in the very pertinent 2020-2022 maturity range beginning at
10:15am and completing at 11:00am. As has been the standard occurrence,
look for the day’s highest volume and volatility just after that.
The rest of the week:
Housing Starts and Building Permits, both expected to be scarcely
different than their previous report although building permits are seen
rising somewhat faster to a 0.690 mln unit annual pace vs a 0.682 mln pace last time. By contrast, Housing Starts are only seen 0.001 mln units higher than January’s 0.699 mln unit pace.
700am – With us as always are the MBA’s weekly application numbers. Last week’s refi index was down to 3971.1 and the overall index stood at 736.5
1000am – Existing Home Sales For February. Seen rising from 4.57 mln annual pace to 4.62 mln.
One of the more important pieces of housing data this week and one of
the only chances to see market movement from an industry-related report.
– With us as always, weekly Jobless Claims. 351k last week, expected
to rise to 355k this week. One of the few non-housing reports we’re
mentioning this week and not surprisingly, the best opportunity for
economic data to have a market impact.
1000am – FHFA Home Price Index
1000am – New Home Sales. Expected to arrive at a 0.325 mln unit annual pace vs a 0.321 mln unit annual pace in January.