Key Economic Data:EUR / USD 1.4967 Up 0.0064
USD / JPY 89.514 Down 0.1430
GBP / USD 1.6745 Up 0.0069
OIL 76.75 Up 0.40
Gold 1,129.30 Up 12.60
FNMA 30-YR 4.5%
Previous close 101.813
Opened up 0.03BPs @ 101.844
Key Economic News:
Retail sales and inventories and the Empire ibdex; Bernanke, Kohn and Fisher on the speaking docket…
8:30: Retail sales for Oct…vehicle sales drive the headline – again. On total sales, median forecast (of 66): +0.9%, ranging from +0.4% to +1.8%; last -1.5%. On sales ex autos, median forecast (of 61): +0.4%, ranging from -0.1% to +1.0%; last +0.5%. A modest rebound in vehicle sales will probably push the overall total of retail sales up in October’ higher gasoline prices also may help inflate the nominal value of sales. Underneath this, the tone of business was a bit disappointing, especially at department stores. Revisions to data for August and/or September, if any, will have bearing on next week’s revision to the +3.5% annualized real GDP growth rate now on record for Q3.
8:30: Empire Index for Nov…consolidating? Median forecast (of 46): +30.00, ranging from +18.6 to +38; last +34.57. This index has surged in October to levels not seen since 2003 and early 2004. Most economists expect some mean reversion, but the entire range of forecasts has it in strong growth territory.
10:00: Business inventories for Sept…ongoing contraction. Median forecast (of 51): -0.7%, ranging from -1.3% to +0.8%; last -1.5%. The implied change for retail inventories in the median forecast is – 0.2% given that we already know manufacturing and wholesale fell 1.0% and 0.9%, respectively. The nonauto component of retail inventories is worth a look to see how it stacks up against the Commerce Department’s assumption of a 0.4% decline.
12:15: Federal Reserve Chairman Ben Bernanke speaks on the US economy before the New York Economic Club…this is his first appearance since the FOMC meeting, when they modified the rate commitment sentence to include more specifics about what conditions might prompt them to consider raising rates. Most speakers since then have suggested that rate increase are not on the horizon.
13:15: Dallas Fed President Richard Fisher speaks on the US economy…to a community forum in Tyler, TX, hosted by the Dallas Fed.
18:15: Federal Reserve Vice Chairman Donald Kohn speaks on “Federal Reserve Policy Challenges”…at Northwestern University.
Advice:
Retail sales – Sales better in Oct; but weaker before — Empire index weaker
Actual: +1.5mom, -1.7% yoy
Previous: -2.3% mom
Consensus: +0.9%
Released Monday, November 16, 2009 at 8:30 (New York time)
Bottom Line: Sales firmer than expected in October, but revised don in prior two months. Empire index gives back part of extraordinary October gain, with sharp drops in both orders and shipments.
Key Numbers
Retail sales +1.4% in Oct (mom, -1.7% yoy) median forecast +0.9%.
ex autos +0.2% (mom, -2.4% yoy) median forecast +0.4%.
Empire index 23.51 in Nov vs. median forecast 30.00.
This morning’s Retail sales numbers came out higher than forecast and could be bad news for rates.
Based on retail sales and the expected decline in Business Inventories I see no reason for interest rates to improve today. I would lock today.
My position on MBSs stays natural today.Click here for a short video that might Save you Hundreds of Dollars Every Month
Click here for a Rate Watch Adoption Form
Video Introduction to Ron Siegel
Click Here to View the Entire “Planning Your Credit Repair” Series.
Click Here to View the Entire “Planning A Home Purchase” Series.
