Why GDP is Seldom a Big Market Mover

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GDP is released 3 times over 3 months beginning on the month that follows the quarter in question.  In other words, Q2 (April-June) is first reported in July.  The first revision is reported today (it’s still August, right?).

GDP always sounds like a big market mover, largely because it’s the broadest and, perhaps, most widely recognized economic indicator out there, but it’s breadth is its downfall in terms of relevance.

Calculating and revising such a broad measurement requires time.  It also sacrifices granularity and specificity relative to more focused reports.  As such, GDP is already a very late report in its first (“Advance”) release.  After all, we’re getting numbers from April, May, and June in today’s report.  That was a long time ago when it comes to econ data!

All of the above accounts for the fact that GDP tends NOT to be a big market mover.  The occasional exception is reserved for the Advance reading as the first release carries the most surprise potential.


MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

MBS

FNMA 4.0

101-24 : +0-01

Treasuries

10 YR

2.8785 : -0.0055

Pricing as of 8/29/18 8:42AMEST

Tomorrow’s Economic Calendar

Time Event Period Forecast Prior
Wednesday, Aug 29
7:00 MBA Purchase Index w/e 232.1
7:00 Mortgage Refinance Index w/e 982.7
8:30 GDP Prelim (%)* Q2 4.0 4.1
10:00 Pending Sales Index Jul 106.9
10:00 Pending Home Sales (%) Jul 0.3 0.9
13:00 7-Yr Note Auction (bl)* 31



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