An Interesting Week!

The week is off to an unusual start I say that because the Chicago NAPM (the gauge for manufacturing and non-manufacturing productivity for the Chicago area) came in slightly better than forecast 48.2 (forecast was 46.0); keep in mind anything less than 50 signals contraction. In the past anything that was even close to expectations signaled a big "sell-off" in the MBS (Mortgage Backed Securities) and hence higher rates. However this mornings release has actually held MBS very steady, in fact we are up 12bp since the close on Friday and in turn this mornings rate sheets are slightly better than Friday. The one thing that is constant throughout this is CHANGE in a moment's blink we could see a swing either way and that is why it is so hard to predict rates right now!

In other news Treasury Secretary Henry Paulson is currently speaking on reorganizing the U.S. financial sector governing body. This could be a big reason why the MBS market is doing quite well; perhaps traders feel the increased guidance and legal oversight will help the financial markets perform well over the long term. ``We should and can have a structure that is designed for the world we live in, one that is more flexible, one that can better adapt to change, one that will allow us to more effectively deal with inevitable market disruptions, one that will better protect investors and consumers,'' Paulson said. (Courtesy of Bloomberg.com)

This week will certainly pick up steam as we have other pertinent news to be released Tuesday through Friday. For instance, March ISM Manufacturing, Weekly Jobless Claims, Unemployment Rate just to name a few. Plan for another volatile week (boy this is getting really repetitive) and hold onto to your hats because I am sure we will get some hurricanes of wind!

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