MBS prices are on the climb this morning (FNMA 4.00 +9/32), on bond-friendly data, and perhaps some reaction to talk of a bailout in Ireland. Consumer Price data (CPI 0.2% vs. 0.3% est., Core CPI 0.0% vs. 0.1% est.) showed no signs of immediate consumer inflation pressure, and the housing data was worse than expected. Both Housing Starts (519k vs. 600k est.) and Building Permits (550k vs. 570k est.) were below expectations. Adding fuel to the rally is word that European finance officials are headed to Ireland to discuss bailout packages for the struggling EU member. The stock market is basically flat (Dow +5.30, S&P +3.76). Keep an eye on the headlines for further news out of Europe, and for any inflation-related topics.
Tomorrow, Thursday, 11/18 has Initial Jobless Claims (est. 442k), Leading Indicators (est. 0.6%), and the Philadelphia Fed (est. 5.0). Initial Claims will be watched for further signs of life in the jobs sector, so expect a lower than expected print to potentially send rates higher, while an up-side miss may allow rates to continue dropping. The Philly Fed is usually a market-mover. Look for a higher than expected reading to spur selling (rates up), while a disappointing number may allow rates to stay low.
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