by Kim | Oct 16, 2023
Key events this week – US Fed Chair Powell speech, US retail sales, CPI reports; UK, Canada, NZ, Japan, and the Euro Area
Recap from last week
US annual headline CPI inflation came in only slightly higher than expected at +3.7% while core inflation was in line with expectations at +4.1%. Annual rates of inflation continue to slow. The FOMC view of inflation trends also looks at core goods, core services, and core services ex-shelter to provide a guide on the path of underlying inflation. In Sep, core goods prices continued to fall (led by used car prices correcting after the pandemic shock) and core services price growth also slowed, though remained high at +5.7%. However, it appears that services and core inflation measures remain sticky, even excluding the large impact from shelter prices, as the 6mth and 3mth annualized inflation rates (across a range of measures) increased again in Sep. While the increase isn’t high by recent standards, the change in trend is worth noting. Also, the latest University of Michigan survey of consumer sentiment for Oct (prelim) noted an increase in the year-ahead inflation expectations to +3.8%, still well above the pre-pandemic range. Long-run inflation expectations also edged back up to +3% while staying within the elevated +2.9%-+3.1% range of the last two years.
The FOMC minutes and speeches throughout the week signaled that the path of rates is likely to stay on hold. Fed speeches noted that recent increases in long yields were doing the work for the FOMC in tightening conditions. Several speeches made this point. The FOMC minutes stated that policymakers expect that the cumulative tightening to date will begin to weigh on future economic activity, hiring, and inflation and that the Fed remains in a position to ‘proceed carefully’. The minutes suggest a higher bar might exist for a further rate increase. It was noted that communications may now need to shift from ‘how high’ to raise the policy rate to ‘how long to hold the policy rate at restrictive levels’.
Outlook for the week ahead
The totality of US data so far in Q3 continues to revolve around the theme of ‘recent stronger than expected activity’. So far, the Atlanta Fed GDPNowcast for Q3 growth is running at +5.1% (and importantly, will be updated this week), payroll growth has improved compared to Q2 (with the help of revisions), and underlying inflation pressure remains persistent.
This week, US data will provide a wide-ranging update across consumption, housing, and industrial output for the final month of the quarter. There will also be a notable number of Fed speeches again this week – as this will be the final week before the blackout week (next week) ahead of the FOMC meeting on 31 Oct – 1 Nov. Fed speeches this week will include Fed Chair Powell on Thursday, speaking on the Economic Outlook.
US retail sales growth is expected to slow to +0.3% in Sep from +0.6% in Aug.
US housing data is expected to begin to show an impact from the recent further rise in mortgage rates. New home builder sentiment is expected to stay at a low level. Existing home sales are expected to fall to 3.89m (SAAR) in Sep – this would be a new low for this pandemic cycle. Building permits are expected to slow to 1.45m (SAAR) in Sep (from 1.54m in Aug). New housing starts are also expected to stay somewhat lower than in recent months at 1.38m (SAAR) in Sep (versus 1.28m in Aug).
US Industrial output for Sep is expected to increase by +0.1% in Sep, from +0.4% in Aug. The first regional manufacturing surveys for Oct will be released and recent weaker manufacturing conditions are expected to continue to stabilize.
Other important data out this week includes global CPI reports for Sep; NZ headline inflation is expected to slow to +5.9%, Canada headline inflation is expected to stay unchanged at +4%, UK headline inflation is expected to slow to +6.5%, Euro area inflation is expected to slow to +4.3%, and Japanese CPI ex fresh food inflation is expected to slow to +2.7% over the year.
Aus data will also feature this week with the latest RBA minutes, a speech by new RBA Governor Bullock, and the Sep labor market survey. Aus net employment growth is expected to slow to +21k while the unemployment rate is expected to stay at a low 3.7%.
Geopolitical risk and uncertainty remain elevated this week.
The US House of Representatives is expected to vote on a new speaker on Tuesday.
This week, the US Treasury will auction and settle approx. $555bn in ST Bills, Notes, and Bonds raising approx. $101bn in new money. The US Treasury will also auction approx. $35bn in 5-Year TIPs and 20-Year Bonds – which will settle at the end of the month.
QT this week: Approx $10.9bn in ST Bills will mature on the Fed balance sheet this week and will be reinvested. Approx $15.6bn in ST Bills, Notes, and Bonds will mature on the Fed balance sheet this week and will be redeemed/roll-off the balance sheet.
More detail (including a calendar of key data releases) is provided in the briefing document – download the pdf below:
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
by Kim | Oct 9, 2023
Key events this week – US CPI, FOMC Minutes, Fed Speak
Recap from last week
For the moment, robust US labor market conditions continue to support growth resilience. Through the tightening cycle so far, indicators of heightened labor demand across non-farm payrolls, employment, job openings, and wage growth have been slowing from historically elevated levels. However, as the stimulus-fuelled growth of the pandemic-era reverses, there has not yet been a material deterioration in labor market conditions. The unemployment rate has stayed low so far in this tightening cycle, initial and continuing claims are low, and layoffs, discharges, and quits are almost back in line with pre-pandemic averages.
The FOMC is likely to view the Sep payrolls as in line with “recent stronger than expected activity” as the process of rebalancing continues. Non-farm payroll growth was stronger than expected in Sep at +336k (expecting +163k), while growth in the two prior months was revised higher by +119k. Growth in average hourly earnings stayed low at +0.2% over the month while annual growth slowed to +4.1%. Contributing to slower average hourly wage growth could be the change in the mix of employment growth. Over the last few months, the household survey has shown that employment growth has been driven by higher part-time employment while full-time employment growth has slowed but has stayed elevated. The average work week and participation rate were unchanged, and the unemployment rate stayed low at 3.8%. The JOLTS data for Aug showed a surprise increase in the job openings rate, back up to 5.8. The number of job openings has been falling through this tightening cycle, but is still above the pre-pandemic average of 4.2, reflecting some ongoing tightness in the labor market.
The global S&P PMI’s showed stalling manufacturing activity persisted through to the end of Q3. Eurozone manufacturing remained in firm contraction, with conditions deteriorating in Japan, the UK, Aus, Canada, and the ASEAN group at the end of Q3. US manufacturing conditions have stayed little changed. Stronger global services growth had been helping to offset weaker manufacturing conditions. However, the services expansion has slowed throughout Q3 to a more modest pace of growth. Services growth has slowed to a stalled pace in the US, the UK, China, and the Eurozone.
The RBA and RBNZ both kept policy settings unchanged in Oct.
Outlook for the week ahead
There are several important events this week. We are now in the lead-up to the next FOMC meeting on 1 Nov and the CPI report for Sep will be an important input. The FOMC is looking for continued progress on slowing inflation and while inflation is still too high, recent reports have been going in the right direction. Headline CPI growth is expected to slow to +3.6% in Sep from +3.7% in Aug and the monthly rate is also expected to ease to +0.3% in Sep from +0.6% in Aug. Core CPI is also expected to ease to +4.1% in Sep from +4.3% in Aug while the monthly core rate is expected to stay unchanged at +0.3%.
The US PPI data for Sep will come out before the CPI report this month. Headline PPI growth is expected to slow to +0.4% over the month, from +0.7% in Aug. Annual growth in the PPI is expected to be little changed around +1.6%.
The latest minutes of the FOMC meeting will be released this week. Of interest will likely be discussions around the timing of (or need for) further rate hikes, as outlined in the Summary of Economic Projections. The market-based probability of another hike in 2023 has come down in recent weeks while long-end yields have been rising.
We will continue to watch initial claims (expected +210k) and the weekly mortgage application data. Mortgage applications continued to deteriorate, falling by 6% last week as mortgage rates increased to the highest level since 2000.
There will be a large number of Fed speakers this week, including Governor Jefferson (The Economic Outlook and Monetary Policy Transmission), Governor Waller (The Evolution of Monetary Policy), and Governor Bowman (Financial Stability in Uncertain Times).
There will be several other data releases; European country-level CPI for Sep, Eurozone, and German industrial production for Aug. The first round of Chinese data for Sep will be released this week which will include CPI/PPI and trade data. Chinese export and import data are expected to continue to improve.
Renewed and elevated geopolitical unrest and local US political uncertainty (due to the removal of the US House Speaker last week) may provide further headline risk through the week.
This week, the US Treasury will auction and settle approx. $433bn in ST Bills, raising approx. $24bn in new money. This week, the US Treasury will also auction approx. $101bn in Notes and Bonds – which will settle next week.
QT this week: Approx $10.3bn in ST Bills will mature on the Fed balance sheet this week and will be reinvested. Approx $1.6bn in ST Bills will mature on the Fed balance sheet this week and will be redeemed/roll-off the balance sheet.
More detail (including a calendar of key data releases) is provided in the briefing document – download the pdf below:
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
by Kim | Oct 2, 2023
Key events this week – US non-farm payrolls & ISM surveys, RBA & RBNZ monetary policy decisions
Recap from last week
US core PCE inflation continued to ease while spending and growth data reflected mostly resilient economic conditions. The elephant in the room is the recent increase in long rates, the extent to which long rates may stay higher, and the expected impact on global activity.
US PCE inflation for Aug came in as expected at +3.5%, accelerating slightly mostly due to energy prices. Monthly headline inflation was +0.4% in Aug up from +0.2% in Jul. Core PCE inflation eased to +3.9% in Aug and the monthly rate moved lower. The latest FOMC median projection for core PCE growth is +3.7% over 2023. The trimmed mean measure of underlying inflation also slowed to +3.9% over the year as the monthly rate stayed low (but has inched slightly higher over the past two months). Overall, another good report for the FOMC which wants to see continued progress on inflation to be confident inflation is on a sustainable path lower.
US personal consumption expenditure growth for Aug was slightly lower than expected at +0.4%, and +0.1% in real terms. Lower spending on goods was offset by growth in services. The average growth in personal spending through Q3 has so far stayed higher than in Q2. Real personal disposable income has recorded consecutive falls over the last three months.
US regional manufacturing surveys continued to stabilize in Sep. The decline in new orders has become less severe except in the Philadelphia and Kansas regions. While the outlook and sentiment have been negative, the slowdown in employment growth has stabilized. The recent fall in the prices paid and prices received indexes has stabilized, with both indexes rising slightly over the last several months.
US housing activity continues to show signs of a renewed impact from rising mortgage rates. Mortgage applications, pending home sales (Aug), and new home sales (Aug) all fell in the latest round of data.
US Q2 GDP growth was confirmed at +2.1% SAAR. While PCE expenditure was revised lower, this was offset by a larger contribution from private investment spending and net exports. The Atlanta Fed GDP Nowcast for Q3 GDP growth has stayed high at +4.9%.
Inflation in the Euro area (prelim for Sep) came in lower than expected at +4.3% over the year and the monthly rate slowed to +0.3%. Core CPI is also expected to be lower at +4.5%.
Aus CPI for Aug came in as expected with headline CPI rising to +5.2% while the monthly rate increased to +0.6%. The shorter-term 3-month SAAR has shown some acceleration in headline inflation. The trimmed mean measure of underlying inflation stayed elevated at 5.6% in Aug. Pressure from services inflation remains elevated in the domestic economy.
Outlook for the week ahead
The main focus this week will be US non-farm payrolls and labor market indicators. This is a key report for the FOMC which is looking for a continued rebalancing of the labor market.
US non-farm payrolls are expected to increase by +163k in Sep (from +187k in Aug). Participation is expected to be little changed at 62.8%, but the unemployment rate is expected to fall to 3.7%. Average weekly hours are expected to be unchanged at 34.4. Average hourly earnings are expected to increase by +0.3% over the month and by +4.3% over the year. The JOLTS survey for Aug is expected to show little change in the number of job openings at 8.83m.
The Sep ISM surveys for the US are expected to show a slight moderation in services activity while manufacturing continues to contract.
There will be several Fed speakers this week. At this stage, Fed Chair Powell is scheduled to speak on Monday, but this is not listed on the official Federal Reserve calendar.
The RBA will meet on monetary policy this week. This will be the first meeting under the new leadership of Governor Michele Bullock. The cash rate is expected to stay unchanged at 4.1%.
The RBNZ will also meet on monetary policy this week. The official cash rate is also expected to stay unchanged at 5.5%.
The global suite of S&P PMIs will be released this week for Sep, providing a broader view of manufacturing and services growth momentum through Q3.
This week, the US Treasury will auction and settle approx. $244bn in ST Bills, raising approx. $65bn in new money. The US Treasury estimates that it will raise approx. $852bn in new money in Q4. The next quarterly refunding update will be on 30 Oct and 1 Nov.
QT this week: Approx $15bn in ST Bills will mature on the Fed balance sheet this week and will be reinvested. Approx $2.4bn in ST Bills will mature on the Fed balance sheet this week and will be redeemed/roll-off the balance sheet.
More detail (including a calendar of key data releases) is provided in the briefing document – download the pdf below:
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
by Kim | Sep 25, 2023
Key events this week – US PCE inflation, spending, housing, and growth, Fed speeches incl Fed Chair Powell, Euro Area & Aus inflation
Recap from last week
There was a further shift to a pause in policy hikes from central banks last week. The FOMC kept rates on hold while the BoE and the SNB both shifted to a pause. The BoJ remained the outlier by maintaining accommodative policy settings.
The FOMC kept rates on hold as expected, maintaining a higher-for-longer outlook for the FFR. Guidance was unchanged with the Committee retaining the option for additional policy firming this year, and penciling in fewer cuts next year, as outlined in the Economic Projections (SEP). The FOMC still sees inflation as too high and is not forecasted to reach targets for some time yet (the US core PCE is not estimated to reach the target until 2026). However, inflation is moving in the right direction, allowing some space to “act carefully” in determining the extent of additional tightening. The Committee wants to see more than three months of progress on inflation and a continued rebalancing of the labor market before it is confident inflation is on a sustainable path lower. Chair Powell noted that they are broadly watching whether the current stronger growth is a threat to the committee’s ability to get inflation back to target or undermine the rebalancing of the labor market. These factors will form part of the “totality of the data” assessment for future decisions. Chair Powell also noted several downside risks to growth going into this final quarter of 2023.
The more resilient US growth currently stands in contrast to concerns over slowing growth noted in other central bank decisions over the last few weeks. The latest was the BoE last week which kept policy rates on hold in another tight 5-4 decision. The Committee noted that policy will need to stay restrictive for “sufficiently long” to lower inflation, however, “some evidence is emerging that the economy is starting to respond”. The BoE noted recent increases in unemployment, inflation easing more than expected in Aug, and “the growth outlook less positive since the last meeting”.
The BoJ maintained its accommodative policy settings, noting “extremely high uncertainties surrounding economies and financial markets at home and abroad”.
The latest round of prelim PMIs for Sep showed growth momentum slowing among the G4 (plus Australia). Services activity has slowed through Q3 while manufacturing activity has remained in contraction. In the Eurozone, both services and manufacturing activity are now in contraction (with a notable deterioration in France this month). In Sep, services growth slowed, but remained moderate in Japan and slowed to a stalled pace in the US. Of note was the stronger fall in the UK services PMI this month, which also noted “solid” declines in staffing levels. In contrast, Aus services activity rebounded from contraction to a modest expansion.
Outlook for the week ahead
Data will focus broadly on US inflation, spending, and growth.
US PCE inflation for Aug is expected to follow the CPI report with a slight increase in the headline rate to +3.5% (from +3.3% in Jul) due to higher energy prices. The monthly pace is expected to increase to +0.5% from +0.3% in Jul. Core PCE is expected to ease to +3.9% from +4.2% in Jul. The monthly pace of core PCE inflation is expected to stay at +0.2%.
US personal spending is expected to slow to +0.5% in Aug from +0.8% in Jul, as personal income growth is expected to increase to +0.4% in Aug from +0.2% in Jul.
The third (final) estimate for US Q2 GDP growth is expected to come in slightly higher at +2.2%.
US new home sales are expected to moderate further to 0.700m (SAAR) from 0.714m in Jul. US housing data was mixed last week; home builder sentiment continued to fall, permits were higher, starts were sharply lower (led by a fall in activity in the West, likely weather-related), and existing home sales continued to fall. Existing home sales fell to 4.040m (SAAR) in Aug, which is now just above the pandemic low of 4m (Jan 2023).
US durable goods orders for Aug are expected to fall slightly by -0.4% after falling by -5.2% in Jul (due to large value orders in Jun).
There will be several US Fed speeches this week, including Fed Chair Powell (Town Hall event for educators).
Other data in focus this week will be the prelim Euro area CPI for Sep. Headline CPI growth is expected to slow to +4.6% in Sep (from +5.2% in Aug). Core CPI is expected to also ease to +4.9% in Sep (from +5.3% in Aug).
The monthly Aus CPI is expected to show inflation increasing slightly to +5.2% in Aug from +4.9% in Jul.
This week, the US Treasury will auction and settle approx. $577bn in ST Bills, Notes, Bonds, TIPs, and FRNs raising approx. $110bn in new money. This brings the unofficial Q3 quarter-to-date total of new money raised to approx. $1,038bn (Est was $1,007bn).
The US Treasury will auction the 2-year, 5-year, and 7-year Notes this week, and, together with the 20-year Bond, these will settle on 2 Oct next week.
QT this week: Approx $6.5bn in ST Bills will mature on the Fed balance sheet this week and will be reinvested. Approx $29.2bn in ST Bills, Notes, and Bonds will mature on the Fed balance sheet this week and will be redeemed/roll-off the balance sheet.
More detail (including a calendar of key data releases) is provided in the briefing document – download the pdf below:
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
by Kim | Sep 18, 2023
Key events this week – Monetary policy decisions; FOMC, BoE, SNB, & BoJ, CPI: Eurozone, UK, Canada, & Japan, Prelim PMIs Sep
Recap from last week
We have previously noted that central banks have been shifting to a pause in the rate hiking cycle, having (hopefully) reached a sufficiently restrictive level of policy rates. Global central banks all appear to be following a similar risk management approach by retaining guidance that further tightening may still be required while inflation remains above target.
Last week, the ECB raised its policy rates by a further 25bps. The increase reflects the assessment that inflation remains too high. However, the also ECB signaled that it may join other central banks in shifting to a pause in the cycle. The ECB considers that growth is likely to stay ‘subdued’ in the coming months and that policy rates have ‘reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to target’. The ECB maintained its data-dependent guidance – that decisions on rates would still be based on the assessment of the path of underlying inflation.
US data since the end of July is unlikely to have changed the expectation for a Fed pause this week. However, resilient growth and CPI data may be enough for the FOMC to keep a further hike in the dots. US CPI for Aug was as expected – with an acceleration in headline inflation due to higher energy prices. Core inflation measures suggest that progress on inflation likely slowed this month. Nominal retail sales were higher than expected with growth heavily influenced by higher gasoline prices in the month. In real terms, annual retail sales growth remained stalled. Slower growth in manufacturing output for Aug was led by a 5% fall in the output of motor vehicles (reversing the prior month’s increase). The NY manufacturing survey for Sep was a bright spot – pointing to some stabilization in the recent trend of weaker regional manufacturing conditions. This included a further improvement in outlook sentiment.
Outlook for the week ahead
The focus this week remains firmly on central banks and monetary policy meetings.
The FOMC is expected to stay on hold this month. The FOMC is likely to note; resilient US growth, some easing of tight labor market conditions, and progress on inflation, despite remaining too high. The dot plot will provide some insight into the expectation for the path of rates from here. Markets have also been pushing out the timing for rate cuts. Other US data out this week includes US housing construction data. Permits are expected to be little changed at 1.44m (SAAR), starts are expected to slow to 1.44m, and existing home sales are expected to improve slightly to 4.1m (from 4.07m SAAR). Initial claims are expected to stay low at +226k.
The BoE is expected to increase its policy rate by 25bps. The last decision was not unanimous, so there could be further disagreement this week. In the inter-meeting period, UK inflation has stayed high, there has been a further rise in unemployment, and growth momentum has slowed. The latest CPI report for Aug will be released before the BoE meets this week. Headline inflation is expected to increase to +7.1% in Aug (from +6.8% in Jul), with the monthly rate rising from -0.4% in Jul to +0.7% in Aug. Core inflation is expected to stay elevated at +6.8%.
The SNB will meet this week and is expected to raise policy rates by 25bps.
The BoJ will meet this week and is expected to keep policy settings unchanged. There has been some signaling by the BoJ in the inter-meeting period that it could consider a further adjustment to policy settings by year-end. The latest Japanese CPI report will be released before the BoJ announcement. The main measure of core CPI ex fresh food is expected to remain mostly steady at +3% in Aug, down slightly from +3.1% in Jul.
Other inflation data out this week includes the final release of the Eurozone CPI for Aug. Eurozone headline and core inflation is expected to be confirmed at +5.3%. Canadian headline CPI for Aug is expected to accelerate to +3.8% (from +3.3% in Jul) while the monthly pace is expected to slow to +0.2% from +0.6%.
Finally, the prelim S&P PMIs for Sep will provide the first view of growth momentum going into the final month of Q3. Momentum has been slowing among key G4 economies, led especially by services sectors in Europe, the US, and the UK. Weaker manufacturing conditions may be starting to stabilize.
This week, the US Treasury will auction and settle approx. $392bn in ST Bills raising approx. $44bn in new money. The US Treasury will also auction the 10-year TIPS and 20-year Bond this week and both will settle in the following weeks.
QT this week: Approx $2.7bn in ST Bills will mature on the Fed balance sheet this week and will be reinvested. Approx $2.7bn in ST Bills will mature on the Fed balance sheet this week and will be redeemed/roll-off the balance sheet.
More detail (including a calendar of key data releases) is provided in the briefing document – download the pdf below:
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
by Kim | Sep 11, 2023
Key events this week – US CPI & retail sales, ECB policy meeting
Recap from last week
A theme of slower growth emerged in central bank decisions and data last week. Central bank policy decisions continued to favor pausing at this stage of the cycle to allow time for rate hikes to take effect. Although inflation is still too high, central banks are taking a risk management approach to policy settings by pausing hikes while retaining guidance that further tightening may still be required.
The BoC kept rates on hold last week. There was a notable shift in the characterization of the Canadian economy between the Jul and Sep meetings. From the Jul meeting; “Canada’s economy has been stronger than expected, with more momentum in demand”. At the Sept meeting last week, this was downgraded to; “The Canadian economy has entered a period of weaker growth, which is needed to relieve price pressures. Economic growth slowed sharply in the second quarter of 2023, with output contracting by 0.2% at an annualized rate.”
The RBA kept rates on hold last week, noting that rate hikes were working to bring “a more sustainable balance between supply and demand”. Changes to the statement suggest that the Board sees tight labor market conditions easing. GDP growth in Q2 was on par with that of Q1 at +0.4%. Much slower private sector consumption and investment spending was offset by public sector spending. The inventory drawdown was a large offsetting factor while net exports were stronger in real terms. Nominal GDP growth slowed due to the sharp decline in the terms of trade as domestic prices increased.
European GDP growth was revised lower in the final release for Q2. Growth in the Euro area and the EU slowed to a stalled pace in Q2. Broader Eurozone retail sales volumes resumed falling again in Jul after stabilizing since Apr. The Jul and Aug Eurozone PMIs point to further weakness in growth through Q3 so far. This slowdown in activity together with still high inflation will weigh on the ECB decision this week. The ECB is expected to keep policy rates unchanged.
US services surveys provided a limited guide on growth momentum into Aug. The S&P Services PMI for Aug indicated a more notable slowdown in services output activity. The ISM Services PMI suggested that growth in services activity was more widespread in Aug – yet the underlying shifts in the output and orders indexes indicated a mixed picture. The US Fed Beige Book report showed that most districts recorded ‘modest’ economic growth during Jul and Aug – led especially by tourism. The latest initial claims fell back to a low level of +216k.
Outlook for the week ahead
This week is the final US CPI and retail sales report for Aug ahead of next week’s FOMC meeting. The FOMC remains in data-dependent mode and the data this week will be important inputs into finalizing the assessment of the path of inflation and growth since the last meeting. US Fed Chair Powell has emphasized the importance of the “totality of the data” and is looking for “supply and demand through the economy coming into better balance”.
Inflation data could muddy the waters this week. US headline CPI is expected to accelerate in Aug to +3.6% (from +3.2% in Jul) due to higher energy prices. Headline CPI over the month is expected to increase by +0.6% in Aug (up from +0.2% in Jul). The focus will likely remain anchored on the path of core CPI which is expected to slow to +4.3% over the year from +4.7% in Jul (slowing due mainly to base effects). Over the month, core CPI growth is expected to stay at +0.2% in Aug, on par with the +0.2% increase in Jul.
US retail sales growth in Aug is expected to slow to +0.2% after increasing by +0.7% in Jul.
US industrial production growth is expected to slow to +0.1% in Jul from +1% in Jun. The NY Fed Empire State Manufacturing survey will provide the first insight into regional manufacturing conditions in Sep.
We are in the blackout period for Fed speeches ahead of the FOMC meeting next week.
The OPEC monthly report will be released on Tue 12 Jul.
The ECB will meet this week and is expected to keep policy rates on hold.
Aus labor market data for Aug is expected to show some improvement in Aug after a weaker report in Jul. Net employment is expected to increase by +26k in Aug after falling by -15k in Jul. The unemployment rate is expected to tick down to 3.6% (from 3.7% in Jul).
The remaining Chinese data for Aug will be released this week. New loans, industrial production, and retail sales are expected to show improvement.
This week, the US Treasury will auction and settle approx. $490bn in ST Bills, Notes, and Bonds raising approx. $121bn in new money.
QT this week: Approx $5bn in ST Bills will mature on the Fed balance sheet this week and will be reinvested. Approx $22bn in ST Bills, Notes, and Bonds will mature on the Fed balance sheet this week and will be redeemed/roll-off the balance sheet.
More detail (including a calendar of key data releases) is provided in the briefing document – download the pdf below:
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
