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.
