by Kim | Mar 8, 2021
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
by Kim | Mar 1, 2021
The focus this week will be on US non-farm payrolls, final global PMI’s for Feb, the RBA rates decision, and several speeches by US Fed Chair Powell and US Fed Governor Brainard.
The main data releases in the US include non-farm payrolls and the ISM reports on manufacturing and services for Feb. Tracking initial claims trends continue to be in focus.
Notable US Fed speeches this week include speeches by US Fed Chair Powell and US Fed Governor Brainard.
The RBA will meet this week. With the recent move in rates, the RBA has increased 3-year bond purchases already this week and we expect more commentary on QE and YCC in the decision. Other key releases in Australia this week include housing finance for Jan, Q4 GDP, and retail sales for Jan.
The US Fed plans to purchase $20.77bn in US Treasury securities (last week $22.4bn). The Fed will also purchase $31.66bn in MBS ($32.4bn last week). The target for the monthly increase in Fed holdings of MBS is at least $40bn/mth.
US Treasury issuance will be heavier this week. While there will be a paydown in Bills, the US Treasury will settle approx. $440bn in Bills, Notes, and Bonds raising approx. $84bn in new money.
This week, approx. $19.3bn 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
by Kim | Feb 22, 2021
The focus this week will be on US data, Fed speeches, and the passage of the next US stimulus bill through the House of Representatives.
The main data releases in the US include personal income, expenditure, and prices for Jan, the final read on consumer sentiment for Feb, the second estimate of Q4 US GDP, and a further read on manufacturing conditions throughout the US. Tracking initial claims trends continue to be in focus – and new claims remain stubbornly high.
There will be several notable Fed speeches this week including US Fed Chair Powell providing semi-annual testimony to the House of Representatives and the Senate, Vice Chair Quarles, Vice Chair Clarida, and Governor Brainard on the Fed’s maximum employment mandate.
The latest proposed US stimulus and relief bill is expected to start its passage through the US House of Representatives. Some key measures include a $1400 one-off payment (for those on <$75k year) and the extension of targeted unemployment benefits through to August.
There will also be several important Aus data releases this week including the Q4 wage price index and Q4 private sector Capex results.
The US Fed plans to purchase $22.37bn in US Treasury securities (last week/short week $17.8bn). The Fed will also purchase $32.45bn in MBS ($24.1bn last week). The target for the monthly increase in Fed holdings of MBS is at least $40bn/mth.
US Treasury issuance will be lighter this week and the US Treasury has also ceased issuance of the 15, 17, and 22 wk CMBs – resulting in a larger paydown. The US Treasury will settle approx. $269bn in ST Bills, 30yr TIPS, and 2yr FRN’s this week. As a result, the paydown will be -$60.9bn. The US Treasury will also auction $210bn in Notes and Bonds this week which will settle next week.
This week, approx. $21.8bn 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
by Kim | Feb 13, 2021
The focus this week will be on the pace of global growth momentum in Feb, Central Bank minutes, and the development of the next US stimulus package.
The prelim global PMI’s for Feb will be released across the larger economies this week. While infection rates have started to ease and vaccinations have commenced, many countries are still affected by restrictions. Consumer-facing service sectors remain the most affected while manufacturing has generally remained resilient.
It is a short week in the US, but it will be busy on the data front. Key data releases for the US include retail sales for Jan, FOMC minutes, and a range of housing data (starts, approvals, and existing home sales) for Jan. Industrial production data for Jan will be released and will provide some hard data to contrast with the manufacturing survey data.
Last week, US consumer sentiment data indicated a continued weakening of expectations and sentiment generally. This was despite the expectation for another round of stimulus payments – the details of which are currently under development.
More surprising was the finding that consumers, despite the expected passage of a massive stimulus bill, viewed prospects for the national economy less favorably in early February than last month. http://www.sca.isr.umich.edu/
The decline in sentiment was led by falls in the expectations index as well as sentiment among households with annual incomes below $75,000. This highlights the significant progress that still needs to be made in employment and income growth. The current initial claims data continued to edge lower last week. The direction is positive, but the level remains elevated. Total continuing claims (latest data is from the week ending 16th Jan) were substantially higher at 20.3m people compared to 17.8m people in the prior week. This was led by a continued shift into Federal pandemic assistance programs.
Both Europe and Japan will report prelim Q4 GDP growth this week.
The ECB and RBA will release the minutes of recent interest rate decisions.
Finally, the Australian labour market and employment report for Jan will be released.
The US Fed plans to purchase $17.8bn in US Treasury securities (last week $29.5bn). The Fed will also purchase $24.1bn in MBS ($32.5bn last week). The target for the monthly increase in Fed holdings of MBS is at least $40bn/mth.
US Treasury issuance will be heavier this week. The US Treasury will settle approx. $411bn in ST Bills, Notes, and Bonds this week, raising $63bn in new money. The US Treasury will also auction $33bn in 30yr TIPS and 2yr FRN’s – which will settle next week. This week, approx. $65bn 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.
by Kim | Feb 8, 2021
A much quieter week on the data front.
The main US data releases this week will be the University of Michigan consumer sentiment data for early Feb and CPI for Jan. We continue to follow the initial jobless claims as one of the higher frequency indicators of employment improvement. Last week, initial claims for State and Federal programs were again somewhat lower at +1.16m claims by people (the prior week was 1.24m new claims). Total ongoing claims have also started to trend lower. Ongoing claims totaled 17.8m people (wk ending 16 Jan).
US Fed Chair Powell will give a speech this Wed on the “State of the US Labor Market” at the Economic Club of NY.
Germany industrial production for Dec will be released this week and will be an important barometer, as Germany has been the key market lifting broader Eurozone manufacturing activity. Rising infections and tightening restrictions have been impacting the German economy. Last week, German retail sales and new factory orders disappointed in Dec.
In Australia, business and consumer sentiment surveys will be released this week for Jan and early Feb. These are the high-frequency indicators of activity and sentiment. While the pandemic remains under control and activity continues to rebound, pockets of weakness remain. It will be important to see how sentiment is trending among states and key industries.
The calendar of US Fed purchases of Treasuries and MBS is incomplete for this week, and the new schedule will be released on 11 Feb. For the week up to, and including the 11 Feb, the Fed plans to purchase $16.63bn in US Treasury securities (last week $23.6bn). The Fed will continue to purchase MBS at an elevated pace, this week buying $27.2bn in MBS ($32.4bn last week). The target for the monthly increase in Fed holdings of MBS is at least $40bn/mth.
US Treasury issuance will be lighter this week. The US Treasury will settle approx. $285bn in ST Bills this week, with no change in new money.
This week, approx. $18bn in Bills will mature on the Fed balance sheet and will be rolled over.
This week, the US Treasury will also auction $126bn in Notes and Bonds – which will settle next week.
The US Treasury released the Q1 refunding documents last week. The estimated net cash to be raised this quarter was revised to $274bn (down from the original $1.127tr estimate). The US Treasury cash balance is expected to be $800bn at the end of Q1 (currently approx. $1.6tr). Changes to the issuance of CMB’s will commence after 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 Kim | Feb 1, 2021
The focus this week will be on the momentum of private sector growth for Jan, including US non-farm payroll growth, global PMI’s, and several central bank monetary policy decisions.
This week the BoE and RBA will meet on monetary policy.
The final global PMI’s for Jan will be released – providing a firmer view of the growth momentum coming into the start of 2021.
The main US data releases this week will be non-farm payrolls and employment for Jan and the ISM reports for the manufacturing and services sectors. We continue to follow the initial jobless claims as one of the higher frequency indicators of employment improvement. Last week, initial claims were slightly lower but total initial claims remained elevated at +1.3m claims by people.
In Australia, housing lending and retail sales (both for Dec) will be in focus. The Dec lending data indicated that the value of housing lending commitments reached a new record high value and increased by +8.6% versus Nov.
The US Fed purchases of Treasuries will be higher this week. The Fed plans to purchase $23.6bn in US Treasury securities this week (last week $10.7bn). The Fed will continue to purchase MBS at an elevated pace, this week buying $32.4bn in MBS ($36bn last week). The target for the monthly increase in Fed holdings of MBS is (at least) $40bn/mth.
US Treasury issuance will be heavier this week. The US Treasury will settle approx. $520bn in ST Bills, Notes, FRN’s, and Bonds this week, raising approx. $106bn in new money.
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.
