The Macro Outlook for w/c 7 September 2020

by Kim | Sep 7, 2020

Highlights for this week include the ECB rates decision, Brexit talks in London, and a generally quiet data week across the board.

A short week for the US with the Labor Day National holiday on the 7 Sep. US data highlights this week will be the initial and continuing jobless claims data and the CPI for Aug.

The US Senate and House are both back from recess over the next week. With the US Presidential election less than two months away now, further negotiations on stimulus will likely be in focus.

Other highlights this week:

China trade data for Aug – an important barometer for the recovery of global demand and production.

Germany Industrial Production for Aug – also an important barometer for the recovery of global demand.

The ECB will meet this week on rates and monetary policy.

The Brexit trade deal negotiations between the EU and the UK will be held in London this week. It is expected that the UK PM Johnson will set a 15 Oct deadline for the trade negotiations. There has been little progress on the trade deal negotiations so far.

The US Fed purchase of Treasury securities is again below the $20bn benchmark, while purchases of MBS are above the $20bn benchmark (note that this is a short week). Treasury Security purchases by the Fed this week will be $11.95bn (last week total $15.42bn). The purchase of MBS will be $22.1bn this week (last week $24bn).

US Treasury issuance will be lighter this week and there will be a net paydown.  The US Treasury will settle approx. $319bn in ST Bills this week, with a net paydown of $13.7bn.

More detail (including a calendar of key data releases) is provided in the briefing document – download the weekly brief here;

Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net