by Kim | Jan 25, 2021
Mostly US-focused data releases and the FOMC meeting this week.
The US FOMC two-day meeting will be held this week with the policy decision announced on Wed 27 Jan. The expectation is for rates and other policy settings to remain unchanged. The press conference is likely to shed further light on recent comments regarding the tapering of asset purchases and inflation targets.
The main US data releases this week will be the University of Michigan consumer sentiment for the second half of Jan. Talk of a further stimulus package (but running into roadblocks?) and the ramping up of vaccinations are likely to result in some improvement in sentiment.
US Q4 GDP will be released this week.
The PCE price index for Dec (as well as income and expenditure) will also be released this week. This is the Fed preferred measure of consumer prices. Anecdotes from various PMI’s reflect some price growth pressure for inputs but not all firms or sectors have passed these price increases on. Services price growth is likely to provide an offsetting effect.
We continue to follow the initial jobless claims as one of the higher frequency indicators of employment improvement – last week, initial claims for Federal programs were notably higher as programs were extended. Total initial claims remained elevated at +1.38m last week.
In Australia, the Q4 CPI will be released. This will be an important input into the RBA meeting on rates next week.
The US Fed purchases of Treasuries will be much lower this week, but MBS purchases will be significantly higher. The Fed plans to purchase $10.7bn in US Treasury securities this week (last week $16.6bn). The Fed will continue to purchase MBS at a faster rate, this week buying $36.02bn in MBS ($23.9bn last week). The Fed target for MBS purchases is approx. $40bn/mth.
US Treasury issuance will be slightly heavier this week. The US Treasury will settle approx. $334bn in ST Bills and 10yr TIPS, raising approx. $5.8bn in new money.
This week, approx. $25bn in Bills will mature on the Fed balance sheet and will be rolled over.
This week, the US Treasury will also auction approx. $235bn in Notes, FRN’s, and Bonds, raising approx. $106bn in new money and will settle next week.
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 | Jan 25, 2021
Primary trends remain unchanged - global equities remain in 5th wave extend and pretend with no evidence of a tradable top, Bitcoin declined in 3 waves of equality, the bond market rally appears corrective (especially the long end), the DXY declined from 4th wave resistance while PM's remain in a larger corrective decline. The weaker […]
by Kim | Jan 18, 2021
The main highlights for this week are the Inauguration of Joe Biden as the next US President, the prelim global PMI’s for Jan, and the ECB and BoJ interest rate decisions.
This week, Joe Biden will be inaugurated as the next US President. Four areas have been highlighted for “urgent action” by the new administration: Covid-19 vaccination roll-out, further economic stimulus ($1.5tr relief plus $15min wage with infrastructure spending to follow), racial equality, and climate change.
This week, the ECB and the BoJ will meet on interest rates. It will be a quiet week for the US Federal Reserve ahead of the FOMC meeting next week.
The prelim global PMI’s for January will be released this week. This should provide some insight into momentum across the major economies coming into 2021 – especially given the level of infections & subsequent restrictions in place across many of these economies.
In the US, the key data releases will be initial and continuing jobless claims. Last week there was a notable rise in initial claims – which could be a seasonal increase after the holiday period. Data for new building permits and housing starts in Dec will be released this week.
In Australia, the labour market and employment survey for Dec will be released. This is a key data point for the RBA and interest rate policy.
The US Fed purchases of Treasuries will be slightly lower this week given the short week. The Fed plans to purchase $16.6bn in US Treasury securities this week (last week $26.6bn – updated). The Fed will continue to purchase MBS at a faster rate, this week buying $23.9bn in MBS ($28.3bn last week – updated). The Fed target for MBS purchases is approx. $40bn/mth.
US Treasury issuance will be lighter this week. The US Treasury will settle approx. $285bn in ST Bills this week with no increase in new money for the week.
This week, approx. $21bn in Bills will mature on the Fed balance sheet and will be rolled over.
This week the 10yr TIPS auction will take place (raising approx. $15bn in new money) and will settle next week.
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 | Jan 18, 2021
Last week saw the global risk markets pause to digest recent gains as we saw pullbacks in equities, commodities, the Euro and rates. We do not have confirmation of a change in trend for risk assets as recent declines appear corrective. Bullish sentiment remains at extremes with added fiscal spending and central bank commitment to […]
by Kim | Jan 11, 2021
The weekly macro review for w/c 4 January 2021 – It was a turbulent week with further social and political unrest in the US, some weak data points, and continued peaks in Covid-19 infections and deaths.
In the US, the Democrats won the two Senate runoff races in Georgia. The Democrats will now lead a 50-50 split Senate for the next two years, with Democrat Vice-President Harris to cast the deciding vote. This opens the way for the Democrat agenda. By the end of last week, it was rumoured that another round of relief spending would be considered in the vein of $US3-4tr – made up of another round of one-off payments and infrastructure spending. This would be in addition to the $900bn in relief aid already passed.
The US non-farm payrolls last week highlighted the adverse impact of this current, more severe wave of Covid-19 cases. New peaks in cases and deaths continue to be recorded in the US. In many cases, local restrictions resulted in a severe decline in services (leisure and hospitality) payroll jobs in Dec. This was partially offset by increases across some services jobs such as trade, transport, and retail, as well as increases in goods-producing jobs. The household employment survey was little changed in Dec. The increase in employment was small – but was at least made up of higher growth in full-time jobs (offset though by a severe decline in part-time employed persons).
The main themes from the ISM’s were ongoing and increasing business disruptions from the current wave of infections. Supplier lead times continue to lengthen, led by transport and human resource constraints. There was a notable increase in the proportion of firms reporting higher input prices this month – especially across some commodities. Underlying demand conditions were surprisingly resilient given the disruptions.
The global PMI reports for Dec were generally stronger across manufacturing while services remained weaker. Across several larger economies – Germany, UK, and Japan, new peaks in infections have led to a further tightening of restrictions. This will likely impact the results for the next month.
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 macro outlook for w/c 11 January 2021 – The highlights this week will be key data points, several Fed speeches, and the ongoing US political and social unrest.
After a tumultuous week for the US, the focus is likely to remain on US politics. One of the important points will be how quickly (and how much) the new administration will move on a further round of stimulus/relief spending.
News of the rollout of Covid-19 vaccines continues to be overshadowed by rising infections and the re-imposition of restrictions. Last week, several major economies announced new shutdowns or restrictions including the UK, and countries such as Japan and Germany are also looking at further restrictions to reduce the growth of infections.
In the US, the key data releases will be retail sales for Dec, consumer sentiment for early Jan and, CPI for Dec. There will also be several US Fed Governor speeches including Fed Chair Powell on Thursday.
The new schedule of Fed purchases of Treasuries and MBS will be released on Thur 14 Jan, so the total value for this week is incomplete. So far, the Fed plans to purchase $13.8bn in US Treasury securities this week (last week $26.4bn). The Fed will also continue to purchase MBS at a faster rate this week buying $21.9bn in MBS ($28.8bn last week). The Fed target for MBS purchases is approx. $40bn/mth.
US Treasury issuance will be heavier this week. The US Treasury will settle approx. $405bn in ST Bills, Notes, and Bonds this week, raising approx. $63.6bn in new money for the week.
This week, approx. $19bn in Bills 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.
