The focus this week will be on the ECB interest rate decision, key data releases, and approval of the US stimulus and relief bill.
Base effects will start to become an important theme – especially for CPI. Data releases are starting to cycle over some of the periods of severe contraction in activity from a year ago (i.e., Chinese trade data for Feb). This will distort year-on-year % comparisons.
The latest US stimulus and relief bill ($1.9tr) was approved by Senate Democrats over the weekend. Spending and benefit extensions are likely to be enacted before 14 Mar benefits expire.
It will be a quiet week for the US Federal Reserve ahead of next week’s FOMC meeting. This week, the focus will be on the ECB rates decision.
Key data highlights in the US this week include the University of Michigan prelim consumer sentiment for Mar and the CPI and PPI for Feb.
Other highlights include Chinese trade data, Eurozone Q4 GDP, and Japanese Q4 GDP.
The new schedule for QE purchases will be released later this week – so data is incomplete for the week at this stage. The US Fed will purchase at least $6.6bn in US Treasury securities (last week $20.8bn). The Fed will also purchase at least $24bn in MBS ($31.7bn last week).
US Treasury issuance will be lighter this week. The US Treasury will settle approx. $230bn in ST Bills with a paydown (Bills) of approx. $55bn.
There will be a focus on US Treasury auctions of the 3yr and 10yr Note and the 30yr Bond this week. All will settle next week, raising approx. $99bn in new money.
This week, approx. $16.3bn 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
