by Kim | Feb 23, 2020
The major data highlights this week will be China data, US Q4 prelim GDP and Japan retail sales and industrial production. This will be amid the likely ongoing headlines regarding the coronavirus.
Data out for China this week includes retail sales, industrial production and fixed asset investment. At the end of the week, the Chinese NBS will also release the Manufacturing and Non-Manufacturing PMI’s for Feb. Note that this data could be delayed as a result of managing fallout from the spread of coronavirus.
US data will feature the prelim reading
of Q4 GDP. More regional survey data for Feb will also be released this week.
The feature of the regional surveys last week was the acceleration in growth of
new orders (as well as inventories). The US manufacturing PMI showed growth
slowing and services were even weaker, falling into contraction – at odds so
far with the stronger readings from the regional surveys. It’s possible that supply
chain disruptions due to coronavirus could manifest in several ways (aside from
just the halt in supply) – firms could start to stockpile parts/finished goods in
the short term, resulting in the spike in new orders and some firms could
benefit as alternative suppliers are sought. More detail should come to light
as further regional survey results and durable goods data are released this
week. The final consumer sentiment reading for Feb will also be released – looking
to see whether there has been any revision to US sentiment from the coronavirus
news (there was minimal mention in the prelim Feb release).
The
main Fed speaker this week is Vice Chair Clarida – US Economic Outlook and Monetary Policy, at the
36th Annual National Association for Business Economics Economic Policy
Conference, Washington, D.C.
Japan remains firmly on the radar –
especially after last weeks’ decline in GDP for Q4 and now the accelerated
contraction in the Feb prelim PMI’s. This week, retail sales and the prelim industrial
production for Jan will be released.
Also note that Germany will release this
week the detail (and possible revision) for Q4 GDP.
The supply of US Treasuries settling this week will again be heavy, but not to the same degree as the week prior. The US Treasury will settle approx. $231bn in ST Bills, FRNs and TIPS this week, raising approx. $45.9bn in new money. This will continue to be supported with overnight repo operations on each business day of up to $100bn as well as two 14-day term repo operations this week of up to $25bn each.
More detail, including a one-page calendar of key data releases for the week, is provided in the briefing document – download the file here;
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
by Mars Capital Partners | Feb 22, 2020
Last week saw another failure at marginal new highs as expected in what was likely to be a 5th wave completion. While the decline is not clearly impulsive, there are enough warning signs in place to mark at least an intermediate term top. What we don't know is whether this latest rally completed all of […]
by Kim | Feb 17, 2020
The macro review for w/c 10 February 2020 – US data reflects the ongoing dichotomy between production and consumer metrics. Industrial production continued to decline slightly led by the weakness in aircraft and electricity and gas output. The USTR also announced this week that the US was increasing the import duty on civilian aircraft imports from the EU from 10% to 15% in Mar.
At the same time, measures of consumer
sentiment and expectations lifted to the second highest levels since the GFC. Very
few mentions were made by consumers regarding Coronavirus. Retail sales growth
increased at a slightly faster pace in Jan with annual growth slowing but
remaining elevated. While JOLTS data indicates more significant slowing in job
openings, metrics such as new job hires remains elevated. Consumer price growth
accelerated led by energy.
Outside of the US, growth remains
weaker.
Weaker economic conditions persisted in
Q4 for Europe. Industrial production declined notably in Dec across the
Eurozone. GDP growth in Q4 was much slower – and particularly weak in the
larger economies – zero growth in Germany and declines in Q4 GDP in Italy and
France.
UK GDP slowed to zero in Q4 – with
distortions in the data due to the Brexit process.
Aus business conditions and confidence
in Jan continued to track well below trend averages – reflecting the ongoing
malaise in the economy. While there was little obvious deterioration in
regional data due to bushfires, trading conditions still weakened and
employment growth slowed notably. Conditions are expected to remain weaker as
forward orders and exports remain in contraction.
There are more data releases covered in the review document. Use the links on the contents page to navigate to different country sections. Download the review here;
The outlook for w/c 17 February 2020 – There are several important highlights this week.
On
the data front, the prelim PMI’s for the US, Europe, Japan, UK and Aus will be
released at the end of the week. This will be one of the broader, earlier
indicators of any disruptions to output from the Coronavirus quarantine.
In
the US, FOMC minutes, PPI for Jan and several regional manufacturing surveys
for Feb will be released.
The
US Treasury will be settling approx. $303bn in in ST bills, notes and bonds
this week – raising approx. $77.5bn in new money. One of the heavier weeks of
supply for a while. This will continue to be supported with overnight repo
operations on each business day of up to $100bn as well as two 14-day term repo
operations this week of up to $25bn each.
The
ECB minutes will also be released this week.
Data
out of Japan this week includes the prelim Q4 GDP result, industrial production
and merchandise trade for Dec and CPI for Jan.
For Aus, the RBA minutes will be released. Important Q4 wage price index and Jan labour market data will be released.
More detail (including a calendar of key data releases) is provided in the briefing document – download the file here;
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
by Mars Capital Partners | Feb 16, 2020
Last week, global risk assets continued their liquidity fuelled rallies despite mounting pressures on the global economy. The US as the "best house in a bad street" analogy continues with capital seeking a safe haven in US assets. The US$, Treasuries and Equities all outperformed global peers as the equity market rally narrows. MAGA (MSFT, […]
by Kim | Feb 10, 2020
There has
been resolution across several important fronts so far this year – removing
some of the uncertainties that had been plaguing markets in 2019; the US has
officially ratified the USMCA, the phase one trade deal with China and Japan
has been signed, the impeachment trial of the US President has been dismissed
and the first part of Brexit has been completed.
Headline
risk of late has been centered around the onset of the coronavirus and the
possible implications for global demand (aside from the dreadful human cost).
There has been little data yet to show how quarantine actions to control the
virus has impacted the second largest economy – China. In some regions in
China, firms have been asked to “voluntarily” return to work from 1 Mar after
New Year break. Trade data for Jan due to be released last week, has been postponed
until the Feb data is released. This week we will see several of the major
economic releases from China which may start to show the impact within China;
retail sales, industrial production, CPI, PPI, fixed asset investment and new
loans (Jan).
There are
several other important data highlights this week;
In the US,
retail sales, CPI, industrial production for Jan and the prelim consumer
sentiment for Feb will be released.
US Fed
Chairman Powell will give testimony this week over two days with the semi-annual
Monetary Policy Report to the Congress. The other Fed speech of note will be Vice
Chair Quarles on Bank Supervision (Yale Law School Dean’s Lecture, New Haven,
Conn).
The prelim Q4 GDP will be released for the Eurozone
including Germany and the UK.
In Aus,
housing finance for Dec will be released along with the NAB business conditions
for Jan. There is likely to be some disruption to the economy from
bushfires/natural disasters and the impact from the coronavirus.
It will be a somewhat heavier week for US Treasury settlements from the perspective of new money raised. The US Treasury will settle approx. $209bn in ST Bills this week, including a new 56-day Cash Management Bill (CMB) for $30bn, raising approx. $54.2bn in new money.
More detail, including a one-page calendar of key data releases for the week, is provided in the briefing document – download the file here;
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
