Fed Funds Futures Pricing 31.1% Chance of Rate Cut for Fed?s Year End Meeting

Fed funds futures are now pricing a 31.1% chance that the Federal Reserve will cut rates by 25 bps for the year end meeting scheduled for Dec. 16 amid a growing U.S. trade deficit and increasing continuing claims report released today. Read More Now

Friday?s Events: U.S. Retail Sales, PPI, Michigan Sentiment; Cdn Cap Utilization

U.S. retail sales and producer prices will highlight the early morning's macroeconomic events for the United States, followed by the preliminary Reuters / University of Michigan consumer sentiment index. In Canada, the focus will be on second-quarter capacity utilization rates and the international investment position. Read More Now ...

What?s Priced in: Current Market Expectations for Future Monetary Policy

Markets are currently pricing in the following probabilities for future interest rate moves as of the close on Thursday: FED - OIS Implied Rates Markets are pricing in a 12% chance of a 25bp cut by the next meeting on Sept. 16. Markets are pricing in a 2% chance of a 25bp cut ...

U of Michigan & Reuters Consumer Sentiment Soars in September

The preliminary consumer sentiment survey from Reuters & the University of Michigan soared over 10 points to 73.1 from last month's 63.0 reading. Also, one-year inflation expectations moved down dramatically to 3.6% from August's 4.8% forecast, the biggest monthly drop in nearly three years. Read More Now

Analysts Say Soaring U.S. Consumer Sentiment Won’t Prevent Weak Q3 Consumption

As commodity prices continue to fall, U.S. consumers are feeling much better than economists expected, according to the preliminary consumer sentiment survey from Reuters & the University of Michigan on Friday. However, a less pessimistic reading doesn't mean consumers will rush out to spend their money, economists say. Read ...

Greenspan Says Fed Should Avoid Bailout of Lehman Brothers

Speaking in an interview with Bloomberg TV, former Federal Reserve Chairman Alan Greenspan said the current problems of Lehman Brothers can be solved without having to resort to a bailout by the Fed. Greenspan cautioned that the Federal Reserve should not become the "overseer of financial stability." Greenspan added that ...

Senators Ask that Conservatorship Freeze Foreclosures on GSE Mortgages

Four U.S. Senators have asked the conservators of Freddie Mac and Fannie Mae to freeze foreclosures on mortgages held by the companies for 90 days and to take immediate steps to assist homeowners by modifying delinquent loans. Senators Sherrod Brown (D-OH), Bob Casey (D-PA), Robert Menendez (D- NJ), and Charles Schumer (D-NY) ...

August All-Items PPI Falls 0.9%, Core Up 0.2% M/M

The U.S. Department of Labor's seasonally adjusted core measure of producer price inflation came in line with expectations with a 0.2% month-over-month gain in August, slower than the 0.7% gain seen in the previous month. The all-items measure of producer price inflation fell 0.9% in the month following a 1.2% ...

Friday’s Events: U.S. Retail Sales, PPI, Michigan Sentiment; Cdn Cap Utilization

U.S. retail sales and producer prices will highlight the early morning's macroeconomic events for the United States, followed by the preliminary Reuters / University of Michigan consumer sentiment index. In Canada, the focus will be on second-quarter capacity utilization rates and the international investment position. Read More Now

Foreclosures at Highest Rate Since January 2005, Says RealtyTrac

U.S. home foreclosures climbed 27% from the previous month's year-over-year results, according to RealtyTrac's August 2008 U.S. Foreclosure Market Report. There were 303,879 foreclosure filings in the month of August, a 12% increase from the prior month. According to RealtyTrac, one in every 416 U.S. households received a foreclosure filing. ...

Most Mortgage Rates Dip to Spring Levels under Federal Conservatorship

In its first week at least, the conservatorship of Freddie Mac and Fannie Mae accomplished one part of the hoped-for effect; longer term mortgage rates plunged to levels not seen for months. Freddie's Primary Mortgage Market Survey for the week ended September 11 (which includes the four business days since Sunday's ...

Quarterly Revenue Survey Shows Broad Advances in Q2

A quarterly look at the services sector in the U.S. revealed gains in each of the areas surveyed. Also, revisions in the U.S. Census Bureau report for Q1 data were mostly upward. Read More Now

Fed Funds Futures Pricing 31.1% Chance of Rate Cut for Fed’s Year End Meeting

Fed funds futures are now pricing a 31.1% chance that the Federal Reserve will cut rates by 25 bps for the year end meeting scheduled for Dec. 16 amid a growing U.S. trade deficit and increasing continuing claims report released today. Read More Now

Initial Jobless Claims Fall Back Slightly to 445k

Initial claims for unemployment benefits in the United States came in just slightly above expectations, but still fell 6k from the previous week's upwardly revised figure, the Department of Labor reported on Thursday. Continuing claims rose to 3.525 million for the week ending Aug. 30. Read More Now

Fed’s Kohn Says “Jury Still Out” on Whether Housing Bottom Near

Federal Reserve Vice-Chairman Donald Kohn (voter) said it's not yet clear if house prices in the U.S. are close to finding a bottom. Speaking at the Brookings Institution in Washington, D.C., Kohn did say it's encouraging that the pace of declines is starting to abate in some markets. He noted ...

U.S. Trade Deficit Surges to $62.2 Billion in July

The U.S. monthly trade deficit widened more than expected in July to $62.2 billion, marking the deepest monthly deficit since March 2007. The consensus was for the deficit to come in at $58.0 billion, following an upwardly revised $58.8 billion in June, the U.S. Census Bureau reported Thursday. Read ...

Economists Say Initial Claims Suggest Jobs Market to Stay Weak for Months

Economists say the jobless claims survey for the week ending Sept. 6 suggests that labor market conditions will remain weak for several months. The pace of initial claims has remained above the 400k threshold for eight weeks now, and it is becoming more likely with each week that the elevated ...

RBC CASH Index Says U.S. Consumers Feeling Better on All Fronts

With oil prices falling and a presidential election in less than two months, U.S. consumer confidence may be heating up, says a monthly survey from RBC on Thursday. The index has advanced for two consecutive months, including major boosts in each of the three subcomponents in September. Read More ...

Thursday’s Events: U.S. Jobless Claims, Import Prices; U.S. & Cdn Trade Balance

The U.S. trade balance, jobless claims, and import prices will highlight the day's economic news with Canada receiving the international merchandise trade balance and new housing price index. In Europe, central bankers are busy attending the Ecofin meeting in Nice, France where ECB President Jean-Claude Trichet and ECB Governing Council ...

Economist Says U.S. recovery Unlikely Before 2009

The economy may show flashes of strength before the end of the year, says one of Canada's best known economists, but a real recovery "is a 2009 story." The U.S. Treasury's takeover of Freddie Mac and Fannie Mae helps, but the country is still teetering on the brink of a recession, ...

Fed Funds Futures Price in 17.5% Chance of a Rate Cut for Year-End

Fed Funds Futures are currently pricing in a 17.5% chance of a 25 bps rate cut for the year-end Federal Reserve meeting scheduled for Dec. 16, as markets are focused on earnings results from Lehman brothers and a larger-than- expected draw on crude and gasoline inventories. Read More Now

Mortgage Rates Decline Over Labor Day Week but Real News Should Come this Week

The average mortgage rates reported below result from surveys that concluded two or three days before the federal takeover tsunami hit the market.

Wednesday’s Events: Canadian Labour Prod; DOE Oil; ECB’s Weber

Canadian second-quarter labour productivity highlights the Canadian economic news of the day as U.S. markets receive the Department of Energy's oil inventories and Europeans hear from Bundesbank President Axel Weber. Read More Now

MBA Mortgage Applications Move Up in Week Ending September 5

Weekly mortgage applications in the United States increased in the week ending Sept. 5, according to data released from the Mortgage Bankers' Association (MBA) on Wednesday, which reported a 9.5% week-over-week rise in applications. Read More Now

Experts Moderate Initial Enthusiasm for GSE Takeover

Old Conventional Wisdom, Monday version:

Tuesday’s Events: Canadian Housing Starts & U.S. Pending Home Sales

Canadian housing starts and U.S. pending home sales will be the main highlights of the day's macroeconomic data releases, but comments from Fed Chairman Ben Bernanke speaking on education and European Central Banker Jos

Treasuries Rally and Stocks Decline as Lehman Shares Tumble

Shares of Lehman Brothers are in free fall after talks between the investment bank and a Korean state-controlled bank broke off. Shares of the company, which is the fourth-largest U.S. investment bank, are trading at their lowest since... Read More Now

S&P Puts Lehman on Watch for Downgrade

Credit ratings agency Standard & Poor's put Lehman Brothers on watch for a possible downgrade because of a rapidly declining share price and potential difficulties raising capital. S&P said the long-term 'A' rating and short-term 'A-1' counterparty credit ratings are under scrutiny. Read More Now

Decline in U.S. Pending Home Sales Fail to Suggest a Bottom, Economists Say

U.S. pending home sales fell more than twice the consensus expectation in July, falling by 3.2% in the month following an upwardly revised 5.8% rebound in the previous month. The report fails to indicate a bottoming out in the housing sector, economists say, though the pace of decline is slowing ...

White House Says Bailout Plan is the Right Move at the Right Time

The White House considers the U.S. Treasury's actions to bail out Fannie and Freddie the appropriate action to take, but thinks that Congress should look at reforming the GSEs. "President Bush thinks that the move that Secretary Paulson worked on is the right move at the right time. And this ...

Pending Home Sales Falls 3.2% in July

U.S. pending home sales fell more than expected by 3.2% in July, according to the National Association of Realtors (NAR) on Tuesday. The decline follows a 5.8% rebound in the previous month, so taken together the index suggests a sideways moving trend. Read More Now

IMF’s Lipsky Sees Global Economic Recovery Coming in 2009

Speaking in Frankfurt, Germany on Tuesday, International Monetary Fund First Deputy Managing Director John Lipsky speculated that the global economic slowdown would worsen in the second half of 2008, but expected recovery to come in the following year. "The recovery of global economic activity in 2009 would be driven by... ...

Preview: July Pending Home Sales Expected to Retrace from June Bounce

Pending U.S. home sales in July are expected to have declined from the robust increase seen in June, more or less confirming a "sideways" trend, economists say. Economists polled by Bloomberg are calling for a monthly decrease of 1.3% in July, following a spike of 5.3% seen in June. Expectations ...

Bernanke Avoids Monetary Policy in Speech on Afro-American Education

In a speech at the 2008 National Historically Black Colleges and Universities Week Conference in Washington, DC on Tuesday, Fed Chairman Ben Bernnake made no comments on monetary policy or the U.S. economy, focusing rather on the importance of educational institutions which played a historical role in the education of ...

IBD/TIPP Economic Optimism Index Improves for Second Month

U.S. economic sentiment improved for the second month in a row in September, according to a report from Investor's Business Daily and TechnoMetrica Market Intelligence. The IBD/TIPP index of economic optimism bounced up three points to a reading of 45.8, up from August's 42.8 level and above expectations of a ...

Reactions to U.S. GSE Takeover Range from Strong Support to Taxpayer Worries

The government takeover of Fannie Mae and Freddie Mac wasn't just welcomed by U.S. markets; it also received broad support from the Fed, other central bankers and financial newspapers. However, many are also concerned about how much the de facto nationalization of the government-sponsored enterprises (GSEs) could cost American taxpayers. ...

Treasuries Rally as Mortgage Rates Fall

Treasuries overcame a variety of bearish factors to close higher on Monday. Traders said a sharp decline in mortgage rates sparked a powerful round of buying. Treasuries initially sold off and yields moved higher because of an equity rally and the expected increased U.S. government borrowing. At their highs, 2-year ...

Treasury Department Announces GSE Conservatorship

Unless you spent Sunday spelunking in Howe's Cavern, you probably know that at about 11 a.m. the other shoe finally dropped. After weeks of anticipation and speculation, Treasury Secretary Henry Paulson announced that the federal government had taken over Freddie Mac and Fannie Mae. Read More Now

$1.5 Trillion of Fannie and Freddie Default Swaps to be Unwound

Market watchers are warning of forced selling and diminished liquidity as credit default swaps (CDS) on Fannie Mae and Freddie Mac are unwound following the government bailout of the companies. It appears an estimated $1.47 trillion in contracts protecting against the default of Fannie and Freddie will need to be settled ...

Economists Pleased with Government Takeover of Fannie Mae, Freddie Mac

Economists are reacting positively to the largest- ever financial rescue by the U.S. government - the takeover of mortgage giants Fannie Mae and Freddie Mac announced on Sunday. The deal should help to soften mortgage rates and make it easier for Americans to finance a home, which will contribute positively to ...

Fed Supports Govt Decision of FF Takover Says Bernanke

In a statement released on the Fed's website following an announcement of a takeover of GSEs Fannie Mae and Freddie Mac, Fed Chairman Ben Bernanke threw his support behind the Treasury Department's decision, saying the move would help stabilize the financial system. "I strongly endorse both the decision by FHFA Director ...

Treasury’s Paulson Touts Fannie and Freddie Bailout Plan on Media Round

U.S. Treasury Secretary Henry Paulson made the rounds of all the media outlets this morning, touting his bailout rescue plan of government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. "This is not something I want to do, but this is necessary," said Henry Paulson in a interview with CNBC. ...

U.S. Government Announces Takeover of Fannie Mae and Freddie Mac

In an effort to support the U.S. housing market at the minimum cost to the taxpayer, the U.S. government announced on Sunday plans to takeover Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac which have come under severe pressure as mortgage delinquencies continue to soar, and house prices collapse. ...

The Week Ahead: U.S. PPI and Retail Sales

Traders expect U.S. bonds to potentially move lower with very little data for markets to digest next week. The main data releases in North America are expected later on in the week with the issuance of U.S. PPI, retail sales and the University of Michigan/Reuters consumer sentiment figures. "Outside of ...

Friday’s Events: U.S. & Canadian Employment Reports; Ivey PMI

The Canadian and U.S. employment reports for August followed by the Canadian Ivey PMI will be today's main highlights for North America. In the afternoon, markets will also hear from San Francisco Fed President Janet Yellen (non-voter). Read More Now

Study Says U.S. ‘Housing Bubble Has Popped’

A report on housing prices by Global Insight says that although prices for single-family homes are still heading downwards across the country, the rate of decline has gone down and "extreme overvaluation of house prices is essentially non-existent." Read More Now

Mortgage Delinquency Rate Hits 29-Year High in Second Quarter of 2008

Mortgage delinquencies for U.S. homes in the second quarter of 2008 moved up six basis points from the previous quarter to 6.41% of all loans outstanding, marking a 29-year high, according to the MBA's National Delinquency Survey released Friday. Read More Now

August Nonfarm Payrolls Decline 84k, Unemployment Rate at 6.1%

U.S. nonfarm payrolls declined for the eighth straight month, falling more than expected by a total of 84k jobs in August, according to the Bureau of Labor Statistics on Friday. The unemployment rate was pushed up four-tenths to 6.1% (6.055%), well above expectations that it would remain at 5.7%.Read More ...

Fed’s Fisher Says Inflation Might Not Moderate

The most hawkish voting member on the Federal Open Market Committee said on Thursday that it's unclear whether slow growth will moderate inflation into 2009, and said there are even odds that inflation will accelerate from its current level. Read More Now

$7,500 Tax Credit Now Available to First-Time Home Buyers

When Congress passed the housing rescue bill (The Housing Assistance Act of 2008) in July, we published an article about some of the tax traps contained in the bill, waiting in hiding for the unwary. Warnings duly noted, further information and the regulations regarding this tax credit are now available. ...

Initial Jobless Claims Rise to 444k

Initial claims for unemployment benefits in the United States came in well above expectations, rising to 444k in the week ending Aug. 30, the Department of Labor reported on Thursday. Continuing claims rose to 3.435 million for the week ending Aug. 23. Read More Now

Thursday’s Events: ECB & BOE Rates, ADP Employment, ISM Services, Fed-Speak

The Bank of England and European Central Bank rate decisions will kick off the day, followed by the U.S. ADP unemployment report, initial jobless claims, the ISM non-manufacturing index, Department of Energy oil inventories and some Fed-speakers in the afternoon. Read More Now

Economists Say Fed’s Beige Book is Downbeat, but No Regions in Outright Decline

Markets failed to move on the release of the Fed's Beige Book, an anecdotal summary of the 12 District Banks over the six weeks ending Aug. 25. Economists say the report continues to reveal broad- based weakness, tight credit conditions and elevated price pressures, though not a single region was in ...

MBA Mortgage Applications Move Up in Week Ending September 3

Weekly mortgage applications in the United States increased in the week ending Sept. 3, according to data released from the Mortgage Bankers Association (MBA) on Wednesday, which reported a 7.5% week-over-week rise in applications. Read More Now

CME Group Volumes Fell 32% in August

The number of trades at exchanges run by the CME Group declined by 32% in August compared to a year ago, the company revealed Wednesday. "In August 2007, CME Group recorded its highest monthly volume ever due to the onset of the subprime lending crisis and the ensuing impact on global ...

Mortgage Rates are Mixed, but ARMs Nearly Disappear as Factor in Financing

Due to reports of continued weakness in the economy, rates on fixed- rate mortgages edged lower during the week ended August 28 according to the results of Freddie Mac's Primary Mortgage Market Survey. Last week 34.0 percent of mortgage applications were for the purpose of refinancing an existing loan, down from 35.2 ...

Wednesday’s Events: BOC Rates; U.S. Factory Orders & Beige Book

The Bank of Canada's rate decision tops the news of the day for the country as U.S. markets receive factory orders and the Fed's Beige Book. Also on Wednesday, Europeans will be looking out for comments from European Central banker Gertrude Tumpel-Gugerell. Read More Now

Radar Logic Survey Says U.S. Housing Sector Will Weaken in 2009, Recover in 2011

In contrast to expectations that the U.S. housing market could see a turnaround in the first half of 2009, the monthly housing price index report for June from Radar Logic suggests that recovery won't occur until 2011. Read More Now

Korean Development Bank in Talks to Buy Stake in Lehman

Shares of Lehman Brothers are up 2.8% on Monday after the state-owned Korean Development Bank (KDB) affirmed interest in the embattled Wall Street firm. Read More Now

Construction Spending Drops in July

According to a report from the U.S. Department of Commerce, construction spending in the United States declined 0.6% month-over-month in July. The total construction figure for June was revised to... Read More Now

Fed’s Kroszner Says Credit Turmoil Impairing Emerging Markets

Fed Governor Randall Kroszner said emerging market growth is being hampered by the current credit turmoil. Speaking on the international financial system at a conference in Buenos Aires, Argentina, Kroszner said the challenge of dealing with slowing economic growth around the world has been "complicated" by higher food and energy prices. ...

Fed’s Hoenig Says Fed’s Response to Crisis Makes Price Stability Difficult

Kansas Fed President Thomas Hoenig said the Federal Reserve's response to the U.S. credit crisis has threatened its ability to keep inflation under control. Speaking on the financial turmoil at a conference in Buenos Aires, Argentina, Hoenig said combating inflation is the Fed's key mandate, and added that the Personal ...

Tuesday’s Events: EU PPI, UK Consumer Confidence, U.S. ISM Mfg Report

Euro zone PPI and the UK construction PMI and consumer confidence index for August will dominate the European session as U.S. markets brace for the ISM's manufacturing report for August. At 4:30 a.m. EDT, Markit Economics will release the UK's construction PMI for August. The headline index is expected to decline ...