We start with a typical third Thursday of the month—claims, Philly Fed, and leading indicators—then pile on with mortgage delinquencies and five Fed speakers. Today's POMO focuses on bonds due 5/31/2013 – 11/15/2014
8:30: Unemployment insurance claims….was that drop for real? Last week was the second in three when claims fell below 440k, bringing the four-week average to the lowest level seen this year. This time, forecasters are taking a larger part of that decline seriously, looking for only a 6k increase. The figure to be reported today covers the reference week for the monthly survey of payrolls, and it also includes Veteran’s Day. Continuing claims have been trending down throughout the year, though in large part as people exhausted eligibility and moved to extended/emergency programs.
For initial claims, median forecast (of 46): 441k, ranging from 426k to 455k; last 435k.
For continuing claims, median forecast (of 12): 4.295 million, ranging from 4.27mm to 4.34mm; last 4.301mm.
10:00: Philadelphia Fed business index for Nov…will it follow the Empire index? Earlier this week, the Empire index surprised sharply to the downside, with a big slump in the orders index. As a result, we suspect this report will likewise show a setback in manufacturing activity in the Philadelphia Federal Reserve District.
GS: -5; median forecast (of 60): +5, ranging from -5 to +12; last +1.0.
10:00: Index of leading indicators for Oct…a solid gain. The main drivers this month should be the yield curve (+25bp), stock prices (+16), and real M2 (+13), with most other components either trivially positive or flat. The only decline comes from supplier deliveries (-8bp).
GS: +0.6%; median forecast (of 58): +0.5%, ranging from -0.5% to flat; last +0.4%.
10:00: Mortgage delinquencies and foreclosures for Q3…Last quarter the delinquency rate (percentage of loans past due by 30 days or more) fell 21bp points from a record 10.06%, to 9.85%, and the percentage of loans in foreclosure proceedings dipped 6bp, also from a record, to 4.57%.
10:00: Federal Reserve Governor Elizabeth Duke testifies on “Foreclosure Documentation Issues”….to a subcommittee of the House Financial Services Committee.
11:00: POMO... $6-8 Billion of bonds due 5/31/2013 – 11/15/2014
13:00: Federal Reserve Governor Kevin Warsh speaks on a panel discussing “The Future of Financial Markets”…in Chicago. Gov. Warsh voted for the FOMC’s decision to resume large scale asset purchases but expressed reservations two days later in a Wall Street Journal op-ed piece that also argued for supply-side policies.
13:30: Cleveland Fed President Sandra Pianalto speaks on “Current Economic and Monetary Policy Issues”…at Case Western Reserve University in Cleveland. Ms. Pianalto is a voting member of the FOMC this year.
13:20: Minneapolis Fed President Narayana Kocherlakota speaks on “Monetary Policy Actions and Fiscal Policy Substitutes”…at a National Tax Association annual conference in Chicago. Mr. Kocherlakota is not currently a voting member of the FOMC; his first turn comes in 2011.
16:30: Philadelphia Fed President Charles Plosser speaks on “Asset Bubbles and Monetary Policy”…at the Cato Institute in Washington. Mr. Plosser is not currently a voting member of the FOMC; his next turn comes in 2011.
16:30: Federal Reserve balance sheet….This report should start to show the balance sheet effects of the large-scale asset purchases (LSAPs), as it incorporates the first three operations under the new program. The total sales amounted to roughly $20bn, though some of this would include the reinvestment of repayments of principal on holdings of MBS and agency securities.