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Big Week and Big Change for Mortgage Rates?
This week will be very interesting to watch play out in the markets as there is a great deal of US economic data, including the all-important Non-farm Payrolls (NFP) report on Friday, European and Chinese economic drama and political theater at the Democratic national Convention.
It’s Tuesday and the data will begin flowing quickly during this holiday-shortened week. Today’s key report is the Institute for Supply Management’s manufacturing index (ISM Index). Expectations are for this measure of nationwide manufacturing activity to rise slightly from last month and reach the equilibrium point between expansion and contraction in this sector. A similar report on the Chinese manufacturing sector was released over the weekend and showed that manufacturing dominated economy slipping into contraction territory.
Tomorrow’s market driver will be the US productivity report which is expected to indicate a bump higher in this measure of output per employee. Unfortunately an increase in productivity probably bodes ill for the key employment reports that will follow on Thursday and Friday. When productivity increases it means companies are doing more with fewer employees.
Forecasts for the employment reports due Thursday and Friday (ADP and NFP) seem to reflect a negative trend for job creation. The ADP Employment Change to be issued Thursday morning is expected to show a drop in new job creation from an already tepid level. A very similar and equally weak result is expected from the Friday NFP report. Both jobs reports are expected to indicate job growth that is insufficient to offset new entrants into the workforce, meaning an actual worsening of the unemployment situation.
Thursday may be the most interesting day this week. The European Central Bank will be making a policy announcement in the morning and President Obama will be making his acceptance speech at the Democratic Convention. The ECB’s announcement comes after ratings agency Moody’s has dropped the outlook for the Eurozone to “negative.” The President’s speech comes just hours before the anticipated negative NFP report.
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2012-09-10 02:05:01
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