CHICAGO (MNI) - Aside from tariff headline sensitivity, highlights for the week ahead include:
- Federal Reserve releases the minutes from the March 20-21st FOMC meeting on Wednesday at 1400ET, followed by multiple Fed presidents will be participating in speaking/question and answer events throughout the week.
- Data focus on Producer Price Index (0.2% est) Tuesday at 0830ET and Consumer Price Index (0.2% est) Wednesday at 0830ET.
- Incoming Treasury supply includes 3M and 6M bill supply Monday followed by new $30B 3Y note auction on Tuesday, $21B 10Y note auction/re-open Wednesday, and $13B 30Y bond auction/re-open on Thursday.
On tariff-tied/trade-war concerns with China, Barclays economists said the 'ongoing trade war uncertainty leads us to recommend shifting away from risk assets.'
While 'recent declines in global manufacturing confidence and a moderation in US job gains raise risks to our growth view,' Barclays noted, 'sentiment is still at historically healthy levels, US earnings are strong, and China growth has accelerated, keeping the global expansion intact in Q2.'
Multiple Fed presidents will be participating in speaking/question and answer events throughout the week.
Tuesday at 0430ET, Dallas Federal Reserve Bank President Rob Kaplan to participate in a moderated Q&A at the Tsinghua University School of Economics and Management in Beijing.
Thursday at 1700ET, Minneapolis Federal Reserve Bank President Neel Kashkari to participate in a moderated Q&A with Tim Worke, CEO of Associated General Contractors of Minnesota.
Rounding out the week, Boston Federal Reserve Bank President Eric Rosengren, St. Louis Federal Reserve Bank President James Bullard and Dallas Federal Reserve Bank President Rob Kaplan will be speaking at separate events through the day.
On data, Barclays expects final demand PPI 'to have risen by 0.1% on the month (2.9% y/y) in March' while they forecast an 'increase of 0.2% m/m and 2.6% y/y' in core PPI. 'Final demand PPI has gradually picked up over the past year as the drag from the energy component has diminished, and we expect pipeline price pressures to continue increasing at a moderate pace.'
On CPI, Barclays expects a 'decline by a soft 0.1% m/m in March. This implies an annual pace of 2.3% y/y. For core CPI, we forecast an increase of 0.2% m/m and 2.1% y/y.'
TD Securities economists said 'highly positive base effects (due to the decline in wireless prices falling out of the calculation) will help push core y/y CPI higher to 2.1% from 1.8% previously. Nevertheless, the monthly core CPI reading should continue to run around 0.2%, not showing any particular signs of acceleration.
RBS/NatWest economists expect energy prices to 'pull the headline CPI down into negative territory in March. We expect the drop in energy prices, which should be led by about a 4.5% decline in gasoline, to be partly offset by 0.1% increase in food prices and a 0.2% rise in the core CPI.
On PPI, RBS posits the number 'could have been unchanged last month. Similar to the CPI, we expect food prices within the PPI to have edged up while both energy prices and trade margins could have posted declines.'
'The core PPI (ex food, energy and trade margins) could have also posted a more modest advance of 0.2% in March, following back-to-back gains of 0.4%,' RBS said.
On Wednesday's FOMC minutes, RBS said they 'do not expect all that much new information to be revealed in the FOMC minutes, especially since numerous Fed officials have spoken since the March 21st gathering and their message has been mostly consistent with the March FOMC statement and Powell's press conference.'
Monthly Fed reinvestment caps consistent with the FOMC Sept. 20 decision and June 2017 addendum:
MONTHLY CAPS ON SOMA SECURITIES REDUCTIONS US TREASURIES.../AGENCY MBS/MONTH CAP - Oct-Dec 2017.. $6 billion./$4 billion - Jan-Mar 2018.. $12 billion/$8 billion - Apr-Jun 2018 $18 billion../$12 billion - Jul-Sep 2018 $24 billion../$16 billion - From Oct 2018** $30 billion $20 billion
Calendar of next week's market events (data, Fed speakers): - Apr 09 Mar ETI (107.74, --) 1000ET - Apr 09 Apr NY Fed expectations survey 1100ET - Apr 09 US Tsy $42B 26W bill auction, settle Apr 12 1130ET - Apr 09 US Tsy $48B 13W bill auction, settle Apr 12 1130ET - Apr 09 Mar Treasury Allotments (final) 1500ET
- Apr 10 Mar NFIB Small Business Index (107.6, --) 0600ET - Apr 10 Mar Final Demand PPI (0.2%, 0.1%) 0830ET - Apr 10 Mar PPI ex. food and energy (0.2%, 0.2%) 0830ET - Apr 10 Mar PPI ex. food, energy, trade (0.4%, --) 0830ET - Apr 10 07-Apr Redbook retail sales m/m (0.4%, --) 0855ET - Apr 10 Feb wholesale inventories (0.8%, --) 1000ET - Apr 10 Feb wholesale sales (-1.1%, --) 1000ET - Apr 10 US Tsy $30B 3Y note auction, settle Apr 16 1300ET
- Apr 11 06-Apr MBA Mortgage Applications (-3.3%, --) 0700ET - Apr 11 Mar CPI (0.2%, 0.0%) 0830ET - Apr 11 Mar CPI Ex Food and Energy (0.2%, 0.2%) 0830ET - Apr 11 Apr Atlanta Fed inflation (2.1%, --) 1000ET - Apr 11 06-Apr crude oil stocks ex. SPR w/w (-4.6m bbl, --) 1030ET - Apr 11 US Tsy $21B 10Y note auction, settle Apr 16 1300ET - Apr 11 Federal Reserve releases minutes from the March 20-21st FOMC 1400ET - Apr 11 Mar Treasury budget balance (-$215.2B, -$187.0B) 1400ET
- Apr 12 07-Apr jobless claims (242k, 230k) 0830ET - Apr 12 Mar imports price index (0.4%, 0.2%) 0830ET - Apr 12 Mar exports price index (0.2%, --) 0830ET - Apr 12 08-Apr Bloomberg comfort index 0945ET - Apr 12 06-Apr natural gas stocks w/w 1030ET - Apr 12 US Tsy $13B 30Y Bond auction, settle Apr 16 1300ET - Apr 12 11-Apr Fed weekly securities holdings 1630ET - Apr 12 Mn Fed Pres Kashkari moderated Q&A w/Tim Worke, CEO Assc General Contractors Mn 1700ET
- Apr 13 Bos Fed Pres Rosengren, Greater Boston Eco-Outlook Breakfast, 0730ET - Apr 13 StL Fed Pres Bullard, Washington U's Calhoun Lecture, StL, Q&A. 0900ET - Apr 13 Apr Michigan sentiment index (p) (101.4, 100.2) 1000ET - Apr 13 Feb JOLTS job openings level 6.312 1000ET - Apr 13 Feb JOLTS quits rate (2.2%, --) 1000ET - Apr 13 Q2 St. Louis Fed Real GDP Nowcast 1100ET - Apr 13 Q2 NY Fed GDP Nowcast 1115ET
--MNI Chicago Bureau; tel: +1 312-431-0089; email: bill.sokolis@marketnews.com --MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com
[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]