Highlights for the short week between the Christmas and New Year break include the sign off on the latest US government spending and relief bill and a light data week.
News of the Covid-19 vaccination rollout is running alongside reports of new outbreaks, new faster-spreading strains, and case flare-ups across several countries.
Last week, the UK PM announced further restrictions in response to the discovery of a faster-spreading strain of Covid-19. A further fast-spreading strain has since been identified in South Africa:
The British authorities have detected two cases of the South Africa variant, Mr. Hancock said. In both cases, the infected people had been in contact with people who had traveled to Britain from South Africa in recent weeks. Mr. Hancock said that those infected with the new variant and their close contacts would be quarantined, and that travel from South Africa would be restricted. https://www.nytimes.com/live/2020/12/23/world/covid-updates-coronavirus
The UK parliament will be recalled to vote on the Brexit trade agreement this week. EU members will review the agreement before a formal vote, likely later in Jan.
It will be a quiet week on the data front. The highlights include US initial jobless claims.
The latest schedule of US Fed purchases of Treasuries and MBS will be announced on 28 Dec. Last week’s purchases were lower, in line with the short week. Last week, the Fed purchased approx. $9bn in US Treasury securities and approx. $18.4bn in MBS.
US Treasury issuance will be heavier this week. The US Treasury will settle approx. $558bn in ST Bills, Notes, FRN’s, TIPS, and Bonds this week, raising approx. $188bn in new money. This brings the total of new money raised for the quarter to $575bn – which is approx 93% of the estimated requirement for the quarter.
This week, approx. $62bn in Bills, Notes, and Bonds will mature on the Fed balance sheet and will be rolled over.
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.
We wish all of our valued clients a safe and prosperous New Year.
