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US Credit Mkt Week Ahead: Final FOMC For 2018, Hut, Hut, Hike

     CHICAGO (MNI) - The week ahead should be quiet in the lead-up to the last
FOMC policy announcement of 2018 on Wednesday, December 19 (includes summary of
economic projections/dots, eagerly awaited after the Fed chairman's economic
outlook testimony was canceled due to the national day of mourning for President
Bush).
The Federal Reserve will exit it's self imposed blackout period that started at
midnight last Friday, December 7 and runs through Thursday, December 20.
Data highlights for the week ahead include Housing Starts on Tuesday, Existing
Home Sales on Wednesday, Leading Indicators on Thursday, Durable Goods and
Personal Income and Spending on Friday.
Upcoming U.S. Treasury auctions include 13W and 26W bill auctions on Monday.
Salient data highlights (estimates):
- Monday: Slow start with December Empire Manufacturing Index (21.0 est); NAHB
home builder index; net TICS flows; 13- and 26-week Treasury Bill auctions.
Nomura economists "forecast a decline to 21.0 from 23.3 for the Empire State
survey for December. Industrial sector data have so far shown still healthy
industrial activity."
Regarding NAHB home builder index, Nomura expects the "index to remain at 60 in
December after dropping from 68 in November. The single-family homebuilder
sentiment will gradually deteriorate further as the rising interest rates affect
not only consumer demand but also the construction costs of housing."
- Tuesday, Housing starts (1.220m est) and building permits (1.260m est) for
November; NY Fed Business Leaders Index; Redbook retail sales M/M; FOMC policy
meeting kicks off two day session.
- Wednesday: Existing home sales for November (5.15m est), FOMC policy
announcement (1400ET) followed by Fed Chair Powell press conference.
JP Morgan economists look for the Federal Reserve to raise rates 25 bps (funds
range to 2.25%-2.50%), while the statement "will drop the guidance of expecting
"further gradual increases" in the funds rate."
JP Morgan posits the "general deterioration in financial conditions will lead
the Committee to nudge down their growth forecast. Partly as a consequence, the
median interest rate forecast 'dot' for 2019 will likely slip from 3 hikes to
2."
JP Morgan further adds that if the Fed's stance does become less hawkish next
year, it would be due to a "faltering in the growth outlook, not a
disappointment in inflation or a shift in the Fed reaction function."
Societe Generale economists expect a "dovish " hike of 25 bps Wednesday, adding
it's "likely that the median funds rate projection for 2019 will come down, and
we also expect the distribution to narrow, with the higher dots moving lower." 
SocGen said the statement "will be tweaked to jettison the word "further" in
describing the gradual pace of hikes, but we suspect that it will be coupled
with a sentence indicating that the actual path of the funds rate will depend on
incoming data."
- Thursday: Aside from weekly claims and the Bloomberg comfort index for
December, Leading Indicators for November (flat estimate).
- Friday: Durable Goods and Personal Income and Spending, Q3 GDP (3.5% est).
Morgan Stanley economists anticipate durables goods orders "excluding
transportation to rise 0.3% in November, a decent gain after growth of 0.2% in
October." MS added the "overall durable goods measure rising 1.0% on the back of
a stronger month of aircraft orders."
Calendar of next week's market events (prior, estimate):
17-Dec 0830ET Dec Empire Manufacturing Index (23.3, 21.0)
17-Dec 1000ET Dec NAHB home builder index (60, --)
17-Dec 1130ET US Tsys 13W bill auction
17-Dec 1130ET US Tsys 26W bill auction
17-Dec 1600ET Oct net TICS flows
17-Dec 1600ET Oct long term TICS flows
18-Dec 0830ET Nov housing starts (1.228m, 1.220m)
18-Dec 0830ET Nov building permits (1.265m, 1.260m) 
18-Dec 0830ET Dec NY Fed Business Leaders Index (8.6, --)
18-Dec 0855ET 15-Dec Redbook retail sales m/m (-0.5%, --)
18-Dec    -   FOMC policy meeting kicks off
19-Dec 0700ET 14-Dec MBA Mortgage Applications (1.6%, --)
19-Dec 0830ET Q3 current account balance (-$101.5B, -$124.5B)
19-Dec 1000ET Nov existing home sales (5.22m , 5.15m)
19-Dec 1030ET 14-Dec crude oil stocks ex. SPR w/w
19-Dec 1400ET FOMC policy announcement, in Washington.
19-Dec 1430ET Fed Chair Powell presser/SEP 
20-Dec 0830ET 15-Dec jobless claims (206k , --)
20-Dec 0830ET Dec Philadelphia Fed Mfg Index (12.9, 15.0)
20-Dec 0945ET 16-Dec Bloomberg comfort index (59.4, --)
20-Dec 1000ET Nov leading indicators (--, 0.00)
20-Dec 1030ET 14-Dec natural gas stocks w/w
20-Dec 1130ET US Tsy 4Y/4M Tips auction
20-Dec 1630ET 19-Dec Fed weekly securities holdings
21-Dec 0830ET Q3 GDP (3rd) (3.5%, 3.5%)
21-Dec 0830ET Q3 GDP Price Index (1.7%, 1.7%)
21-Dec 0830ET Nov durable goods new orders (-4.4%, -0.2%)
21-Dec 0830ET Nov durable new orders ex transport (0.1%, 0.6%)
21-Dec 0830ET Dec Philadelphia Fed Nonmfg Index
21-Dec 1000ET Dec Michigan sentiment index (f) (97.5, 97.5)
21-Dec 1000ET Nov personal income (0.5%, 0.3%)
21-Dec 1000ET Nov current dollar PCE (0.6%, 0.4%)
21-Dec 1000ET Nov total PCE price index (0.2%, 0.2%)
21-Dec 1000ET Nov core PCE price index (0.1%, --)
21-Dec 1000ET Nov BLS state payrolls
21-Dec 1100ET Q4 St. Louis Fed Real GDP Nowcast
21-Dec 1115ET Q4 NY Fed GDP Nowcast
--MNI Chicago Bureau; tel: +1 312-431-0089; email: bill.sokolis@marketnews.com
--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com
[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]

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