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
