This week has seen a fairly substantial flow of economic news, and investor enthusiasm has ebbed and flowed with each news items. Overall, this has led to range-bound trading, as investors have tried to discern how each individual data release might influence the Fed’s decision on interest rates (a Fed meeting is scheduled for later this month).

Today, another series of mixed economic reports surfaced, which on balance may have strengthened the view the Fed might cut rates at its next meeting. According to the Mortgage Bankers Association, the initiation of foreclosure process has reached record territory in the second quarter. Furthermore, for a third quarter in a row, new all-time highs were reached in this category.

Soothing words came from the President of the Dallas Federal Reserve - Richard Fisher – who announced today that inflationary pressures are 'increasingly well behaved'. Very similar comments could also be heard from St. Louis Fed President William Poole. Some market observers appear convinced that this type of “Fed talk” was a good reason to believe the Fed would indeed cut rates soon.

Tomorrow will bring the release of the always influential “jobs report” (i.e., the August employment report). The fact that overall trading volume has been very light is interpreted by some market observers as a sign that investors are not willing to step in with conviction at this juncture.

Key economic data for the week starting September 3, 2007. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	8:30 Non-Farm Payrolls August: 108K / 92K Unemployment Rate: 4.6% / 4.6% Average Hourly Earnings: 0.3% / 0.3%

© HGH Associated Press

News Archive (from 7/1/2007 until 9/30/2007)