by Kim | Apr 26, 2021
This will be a big week with more central bank meetings (FOMC and BoJ) and key data releases.
The US FOMC will meet this week with the policy decision due on Wed. No change is expected to the current policy settings. There is some anticipation around how the messaging might start to evolve over the next few meetings – especially concerning a possible timetable for tapering QE purchases. US data – especially upside or downside surprises, will be important to track over the next few months. For the moment, US data is coming in stronger on the back of significant stimulus in Q1 and likely positive impact from the vaccine rollout supporting reopening.
US data of note this week is the prelim release of Q1 GDP – expected to be +6.5% annualized (up from +4.3% in Q4). The Personal Income, Consumption, and PCE Price Index data for Mar will be released on Fri. This is expected to reflect the rollout of the Mar stimulus payments on income growth, higher expenditure, and higher core PCE price growth (expecting +1.8% in Mar versus +1.4% in Feb). Other data of note will be the University of Michigan Consumer Sentiment data for the end of Apr and several regional manufacturing surveys.
The BoJ will also meet this week. No change to policy is expected. The BoJ will release updated economic forecasts.
The prelim Eurozone Q1 GDP data will be released this week. The ECB kept policy unchanged last week – citing near-term downside risks for the economy, especially as many countries are still dealing with outbreaks. The prelim Eurozone CPI for Apr will also be released (expecting +1.6% versus +1.3% in Mar).
In Australia, CPI for Q1 will be released and annual CPI is expected to be +1.4% in Q1 versus +0.9% in Q4 – there may be some base effect.
QE purchases this week: The US Federal Reserve will purchase approx. $18bn in US Treasury securities this week (last week approx. $21bn). The new schedule of MBS purchases will be released on Wed this week.
US Treasury issuance will be heavier this week. The US Treasury will settle approx. $519bn in ST Bills, Notes (2yr, 5yr, and 7yr), Bonds, TIPS, and FRN’s this week, raising approx. $97bn in new money.
This week, approx. $65bn in ST Bills, Notes, Bonds, and FRN’s 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
by Kim | Apr 19, 2021
A quiet week on the data front with the prelim PMI’s for Apr and US housing data for Mar the key highlights for the week.
There will be less activity on the central bank front this week too. The main events are the ECB rates and policy meeting on Thur and the release of the RBA minutes of the Apr meeting.
The US FOMC meets next week (27-28 Apr), so there will be no Fed speakers ahead of that meeting. The FOMC is not expected to change policy settings at this stage. But there is some anticipation around how the messaging might start to evolve over the next few meetings – especially given how the data is progressing. While spending data came in stronger last week, this was still on the back of significant stimulus. But, so far, the labour market has started to record more notable improvements, especially the non-farm payrolls result for Mar. The initial claims across both state and federal programs are now down to 744k (last week, NSA), and continuing claims are also trending lower (still elevated at over 16m people though).
The important data releases for the week;
The initial read on Apr private sector growth momentum with the prelim PMI’s for major economies.
The US existing home and new home sales data for Mar. Existing home sales for Mar are expected to come in a little lower at 6.18m (SAAR) compared to 6.22m for Feb. New home sales are expected to jump to 885k (SAAR) in Mar compared to 775k in Feb.
Australia prelim retail sales for Mar.
Finally, the National CPI for Japan (Mar) will also be released this week.
QE purchases this week: The US Federal Reserve will purchase approx. $21bn in US Treasury securities this week (last week approx. $18bn) and approx. $31bn in MBS (last week approx. $27bn).
US Treasury issuance will be lighter this week. The US Treasury will settle approx. $300bn in ST Bills this week, with a net paydown of -$43bn for the week.
The US Treasury will also auction the 5yr TIPS and 20year Bond this week and both will settle next week.
This week, approx. $24bn in ST Bills will mature on the Fed balance sheet and will be rolled over.
More detail (including a calendar of key data releases) is provided in the briefing document – download the file here;
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
by Mars Capital Partners | Apr 19, 2021
The risk-on sentiment continued last week as global equities continued to rally, the US$ declined, rates stabilised and commodities caught a bid. Bitcoin broke sharply lower from our ending diagonal over the weekend but is yet to confirm a change in trend. While global risk is extended near term, the everything bubble fuelled by low […]
by Kim | Apr 12, 2021
The inflation debate is likely to continue this week with the release of important US data and Fed speeches. The impact of the data flow on key Treasury auctions will be closely monitored.
US CPI for Mar will be reported this week. Data are likely to remain noisy as year-on-year comparisons start to cycle over the onset of the pandemic in 2020. The expectation is for annual growth in the headline CPI to increase from +1.7% in Feb to +2.5% in Mar. Annual growth in core CPI is expected to increase from +1.3% in Feb to +1.5% in Mar.
US retail sales for Mar will be released this week and are likely to reflect the impact of the third round of stimulus. Expecting substantial month-on-month growth of +5.5% in Mar.
US industrial production for Mar will also be released this week. Manufacturing output in Feb was impacted by severe weather shutting down some regional activity for several days. The Mar regional surveys reflect some rebound from that. We will also get the first view of Apr manufacturing momentum with several regional surveys out this week.
The University of Michigan will report the prelim consumer sentiment survey for Apr. So far, despite significant stimulus and the rollout of vaccines, US consumer sentiment has yet to retrace to pre-pandemic levels.
US Treasury auctions will be in focus – especially the 30yr Bond auction on Tuesday after the CPI print. The 3yr and 10yr Notes will be auctioned on Monday.
On top of the data flow, there will be several Fed speeches. Headline speeches include US Fed Chair Powell and Vice-Chair Clarida. Both speeches are scheduled for Wednesday after the CPI print – expect the Fed to maintain its position of tolerating higher inflation prints (“average 2% for some time”).
The Reserve Bank of NZ will meet on rates this week.
The remaining Mar data for China will be out this week – trade, retail sales, and industrial production. GDP for Q1 will also be released.
Finally, the Australian employment and labour market survey for Mar will be released this week. This is not yet likely to reflect the impact from the end of the Government JobKeeper support program at the end of Mar.
The new schedule of Fed purchases of US Treasuries and MBS will be released on Tuesday.
US Treasury issuance will be heavier this week. The US Treasury will settle approx. $386bn in ST Bills, Notes, and Bonds this week, raising approx. $40bn in new money for the week.
This week, approx. $36bn in ST Bills, Notes and Bonds, and TIPS 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
by Mars Capital Partners | Apr 12, 2021
Last week saw a continuation of the bullish equity market rally. The SPX and DJIA led the way breaking clear of new ATH's while the Nasdaq rallied to retest its ATH's. The Russell continued to lag as it remains trapped within a 4th wave correction. The DXY turned sharply lower from resistance while rates and […]
