The Week Ahead
Thursday, July 10, 2008
This week will begin with a number of Federal Reserve speakers and see the release of housing data in both Canada and the U.S. on Wednesday. The relatively quiet week will culminate on Friday with Canada's employment report for June, which is expected to be a key market focus.
Whereas June's change in employment is anticipated to increase by 10k, following a previous increase of 8.4k, the unemployment rate is expected to hold steady at 6.1%.
Economists from Scotia Capital, however, are calling for an increase in the unemployment rate as well. "The impression that Canada's labour market is holding up better than in the U.S. is generally true. As markets look forward to next Friday's Canadian jobs report for June, however, it would be a mistake to ignore emerging pitfalls," they wrote in a research note to clients.
"Canada's buoyant housing market will continue to support construction employment, while public sector employment is expected to gain once again. Nonetheless, this will likely only lead to a gain of around 5,000 workers. As a result, we are expecting the unemployment rate to move up slightly to 6.2% in June."
In the U.S., meanwhile, June's University of Michigan consumer sentiment index is scheduled to be released. Economists are forecasting a preliminary reading of 55.5, down from May's 56.4.
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Posted byAdmin at 1:02 PM 0 comments
Labels: mortgage market, mortgage news
Fed's Yellen Says Markets "May Get Worse Before They Get Better"
Tuesday, July 8, 2008
Federal Reserve Bank of San Francisco President Janet Yellen said Monday market conditions "could get worse before they get better", but that she expects market functioning to "improve markedly" by 2009.
Speaking at the University of California in San Diego, Yellen said inflation risks have "definitely" increased and that the housing sector will likely face more "unpleasant changes."
She said policy is now at a crossroads as it faces competing risks between inflation and growth, though the Fed president said she is "somewhat reassured" by recent data showing no signs of general wage pressure.
"On balance, I still see inflation expectations as reasonably well anchored and I anticipate that consumer survey measures will come down once oil and food prices stop rising," she said. "But the risks to inflation are likely not symmetric and they have definitely increased. We cannot and will not allow a wage-price spiral to develop."
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Posted byAdmin at 4:54 AM 0 comments
Labels: mortgage market, mortgage news