US Cr Mkt Wk Ahead: Powell To Congress, Data, Trade, Month End

     CHICAGO (MNI) - It's going to be a hectic week ahead amid flurry of data

including Q4 real GDP on Thursday and the Fed chair's semiannual monetary report

to Congress on Tuesday and Wednesday, month end (appr .11 duration ext), and

heavy Treasury auctions in the first two days of the week.

     Additional focus on US/China trade talks while President Trump travels to

Hanoi, Vietnam, for a summit with North Korean leader Kim Jong Un on Wednesday

and Thursday.

     Myriad Fed speakers this week backing up Fed Chair Powell's semiannual

monetary report to the Senate on Tuesday and a monetary policy/state of the

economy report to the House on Wednesday.

     Friday's Semi-Annual Monetary Policy Report showed the U.S. economy growing

at solid pace, but Fed will remain patient and data dependent. The report did

not shed light on a balance sheet end date, but repeated that it will be much

larger than pre-crisis when done.

     Dealers are not going out on a limb to express much of an opinion on

expectations of the Fed chair's testimony, but are hopeful more light will be

shed on forward policy and timing of balance sheet run-off.

     Fed speakers on tap include Feb board of governor VC Clarida and Dallas Fed

President Kaplan on Monday; Clarida, Atlanta Fed President Bostic, Philadelphia

Fed Chair Harker and Cleveland Fed Pres Mester on Thursday with Fed Chair Powell

capping the evening off in NY; Atlanta Fed President Bostic rounds out the week

answering eco-outlook/monetary policy questions in DC.

     Salient data highlights (estimates):

     - Monday: Quiet start for data with wholesale inventories (0.2% est) and

wholesale sales; Dallas Fed manufacturing index for February. Treasury 13/26W

bill and 2/5Y note auctions. Fed VC Clarida and Dal Fed Pres Kaplan tour

southern Dallas.

     Nomura economists expect a "modest gain in wholesale inventories in

December. Growth of durable goods inventories held by wholesalers accelerated

sharply around late Q3 and early Q4 as domestic firms adjusted their inventory

levels likely in response to expected increases in tariffs on products from

China."

     - Tuesday: December housing starts (1.261m est), building permits (1.290m)

and Case-Shiller Home Price Index; Conference Board's consumer confidence.

Treasury 52W bill and 7Y note auctions. Fed Chair Powell semiannual monetary

report to Congress.

     JP Morgan economists "forecast that housing starts declined 1.3% to 1.240mn

saar in December while housing permits declined 1.6% to 1.300mn saar." JPM adds

the "recent decline in rates should boost activity in the housing market, and we

look for the single-family data to show increases in both starts (5.0%) and

permits (1.4%) in December."

     On consumer confidence, Morgan Stanley economists "expect the headline

index to recover 4.6 points to 124.8" spurred by the U.S government reopening,

"resolved political uncertainty" and "improved stability in financial markets."

     - Wednesday: December advance goods trade gap, advance wholesale and retail

inventories, factory new orders, NAR pending home sales index for January.

     Fed Chair Powell, Mon/Pol and State of Economy testimony to the House

Financial Services Committee.

     Barclays on advance trade balance forecast the "goods trade deficit to have

widened to $75.5bn in December from $70.5bn previously." Barclays "expect the

deterioration in the goods trade position to be driven by a decline in exports

and as well as a healthy increase in imports reflecting solid activity in the

domestic economy."

     Nomura economists said December factory orders "will likely indicate

healthy expansion in factory activity based on the Census Bureau's advance

report on durable goods orders. That report indicated a 0.1% m-o-m increase in

durable goods orders ex-transportation."  

     - Thursday: jobless claims (220k est); Q4 GDP (init) (2.1% est);

ISM-Milwaukee Mfg Index; MNI Chicago PMI (58.0 est); Q4 housing vacancies rate.

Multiple Fed speakers on tap with Fed Chair Powell on economic developments and

long term challenges dinner event in NY.

     RBC economists note a "downgrade to consumer spending on the heels of one

of the uglier retail sales reports in years (Dec control retail sales tanked

-1.7% m/m) led to a notable mark-down to our 4Q GDP tracking recently. Indeed,

we have baked in just a 2.0% q/q annualized advance for topline growth."

     Citing healthy real personal consumption and Capex vs. disappointing trade

and inventories, RBC anticipates "rather solid GDP report, with final sales to

private domestic purchasers (which excludes inventories and flips imports and

export, i.e., a better gauge of domestic demand) near 3%."

     RBS economists said though they are "somewhat skeptical of the results,"

they are obliged to "lower our Q4 forecasts for both consumer spending and real

GDP. Indeed, in the wake of the retail sales data, consumer spending now looks

likely to have risen by only 2.8% annualized in Q4 (versus our prior expectation

for growth of 4% or more)."

     - Friday: NA-made light vehicle sales throughout the session; January

personal income (0.0% est; 0.5% for Dec); January current dollar PCE (-0.3%);

February Markit Mfg Index; March Michigan sentiment index (f) (96.0 est);

February ISM Manufacturing Index (56.6, 54.8).

     Danske Bank on ISM manufacturing data for February said the "survey still

indicates that the manufacturing sector is expanding in general. As consumption

continues to strengthen, we expect the ISM index to stabilize around its current

level."

     JP Morgan economists expect the Markit manufacturing PMI's "headline

composite to be revised up from 53.7 to 54.0 between the flash and final

February reports, which would represent a 0.9pt decline relative to the final

January reading." JPM added the "flash February report, the headline declined to

its lowest level since September 2017."

     On personal income and spending, Morgan Stanley economist see "a strong

0.5% gain in nominal personal income in December and a solid 0.4% rise in

January. Spending, meanwhile, is poised for an outsized 0.5% drop in December,

which would be the worst reading since 2009."

Calendar of next week's market events (prior, estimate):

25-Feb 0900 Fed VC Clarida, Dal Fed Pres Kaplan tour southern Dallas, TX.

25-Feb 1100 Fed VC Clarida, Dal Fed Pres Kaplan, comm listening session, TX.

25-Feb 1000 Dec wholesale inventories (0.3%, 0.2%)

25-Feb 1000 Dec wholesale sales (-0.6%, --)

25-Feb 1030 Feb Dallas Fed manufacturing index (1.0, --)

25-Feb 1130 US TSY $39B 26W bill auction (912796SF7)

25-Feb 1130 US TSY $40B 2Y note auction (9128286D7)

25-Feb 1300 US TSY $48B 13W bill auction (912796RR2)

25-Feb 1300 US TSY $41B 5Y note auction (9128286G0)

25-Feb 1800 Fed VC Clarida, Dal Fed Pres Kaplan, "National & Global Econ

Issues", Q&

26-Feb 0830 Dec housing starts (1.256m, 1.261m)

26-Feb 0830 Dec building permits (1.322m , 1.290m)

26-Feb 0830 Feb Philadelphia Fed Nonmfg Index (1.0, --)

26-Feb 0855 23-Feb Redbook retail sales m/m

26-Feb 0900 Dec FHFA Home Price Index (0.4%, --)

26-Feb 0900 Q4 FHFA Quarterly Home Prices (1.26%, --)

26-Feb 0900 Dec Case-Shiller Home Price Index (0.3, --)

26-Feb 1000 Fed Chair Powell semiannual monetary report to Congress

26-Feb 1000 Feb Richmond Fed Mfg Index (-2, --)

26-Feb 1000 Feb Conference Board confidence (120.2, 125.0)

26-Feb 1030 Feb Dallas Fed services index (-4.8, --)

26-Feb 1130 US TSY $26B 52W bill auction (912796SD2)

26-Feb 1300 US TSY $32B 7Y note auction (9128286F2

27-Feb 0700 22-Feb MBA Mortgage Applications

27-Feb 0830 Dec advance goods trade gap (-$70.5b, --)

27-Feb 0830 Dec advance wholesale inventories (0.3%, --)

27-Feb 0830 Dec advance retail inventories (-0.4%, --)

27-Feb 1000 Fed Chair Powell, MonPol $ State of Econ, Hse Fncl Svcs Comm

27-Feb 1000 Dec factory new orders (-0.6%, 0.6%)

27-Feb 1000 Dec factory orders ex transport (-1.3%, --)

27-Feb 1000 Jan NAR pending home sales index (99.0, --)

27-Feb 1030 22-Feb crude oil stocks ex. SPR w/w (3.67m bbl, --)

28-Feb 0800 Fed VC Clarida, open remarks NABE Eco/Pol Conf, DC

28-Feb 0830 23-Feb jobless claims (216k, 220k)

28-Feb 0830 Q4 GDP (init) (2.1% est)

28-Feb 0830 Q4 GDP Price Index

28-Feb 0850 At Fed Pres Bostic, Eco & Housing panel, Bank conf, Q&A

28-Feb 0900 Feb ISM-Milwaukee Mfg Index (58.78, --)

28-Feb 0945 Feb MNI Chicago PMI (56.7, 58.0)

28-Feb 1000 Q4 housing vacancies rate

28-Feb 1030 22-Feb natural gas stocks w/w (-177Bcf, --)

28-Feb 1100 Feb Kansas City Fed Mfg Index (5, --)

28-Feb 1215 Philly Fed Pres Harker, eco-outlook

28-Feb 1300 Dal Fed Pres Kaplan, moderated Q&A, real estate cncl, TX

28-Feb 1500 Jan farm prices (1.8%, --)

28-Feb 1630 27-Feb Fed weekly securities holdings

28-Feb 1900 Clev Fed Pres Mester, women in economics, MS, Q&A 

28-Feb 2015 Fed Chair Powell, eco develops'/long term challenges, 

01-Mar  -   Feb NA-made light vehicle sales SAAR (7.1m, --)

01-Mar 0830 Jan personal income (0.2%, 0.0%) (0.5% for Dec)

01-Mar 0830 Jan current dollar PCE (0.2%, -0.3%)

01-Mar 0830 Jan total PCE price index (0.1%, 0.2%)

01-Mar 0830 Jan core PCE price index (0.1%, --)

01-Mar 0945 Feb Markit Mfg Index (final)

01-Mar 1000 Mar Michigan sentiment index (f) (96.0 est)

01-Mar 1000 Feb ISM Manufacturing Index (56.6, 54.8)

01-Mar 1100 Q1 St. Louis Fed Real GDP Nowcast

01-Mar 1115 Q1 NY Fed GDP Nowcast

01-Mar 1315 Atl Fed Pres Bostic, eco outlook/mon-pol, NABE conf DC, Q&A

--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$]