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CHICAGO (MNI) - Data and policy event risk picks up this week, markets
pricing in a 25 bps rate hike for the past several weeks while the prior week
has seen chances of a rate hike at the December FOMC meeting rise to over 90%.
- Consumer confidence Index Tuesday at 1000ET.
Citing "strong labor market and stock prices" and a dip in gas prices,
Morgan Stanley economists expect to see consumer confidence "surging higher in
the Conference Board's survey for September, up 4.5 points to a reading of 137.9
- New Home Sales Wednesday at 1000ET followed by the FOMC policy
announcement and Summary Economic Projections (SEP) at 1400 and the press
conference 30 minutes later.
Barclays economists "forecast new home sales to have increased 0.7% m/m in
August to 631k," adding that "home sales will face a headwind from home
inventory running down and worsening home affordability given the rise in
Suffice it to say, dealers are unanimous in expecting a hike from the Fed
this week, while most are falling in line with a fourth 25bp hike at the
Forward projections and DOT plots become more interesting. Barclays said
"economic projections should feature only minor changes, with the additional
forecasts for 2021 signaling the anticipated effects of restrictive policy on
RBS NatWest joins Goldman Sachs in their expectations of 3 additional hikes
in 2019. Vice Chair Richard Clarida's addition to the Board in September will
unlikely deviate significantly from the mean, RBS said, though "whether the
median shifts up or down could depend on where Clarida sees the neutral rate."
- Data picks up on Thursday with weekly jobless claims, advanced goods
trade balance, GDP and durables all at 0830ET, Pending Home Sales at 1000ET.
On Pending Home Sales, Barclays economists expect the figure to decrease
"1.0% m/m and to have fallen 1.5% y/y in August. Pending home sales have been
soft over the past few months and we expect that to extend to August.
The Federal Reserve exits their media blackout Thursday after midnight.
- Personal Income/Spending and Core PCE data rounds out the week at 0830
Friday followed by Chicago PMI at 0945ET and University of Michigan sentiment
index at 1000ET.
Ongoing trade risk -- Trump against the world continues.
In regards to factoring in the trade risk effects on policy decisions, BNP
Paribas strategists posit the Fed "will err on the side of being more
accommodative and sensitive to an economic slowdown rather than worry about a
'temporary' or 'transitory' increase in inflation."
Nomura economists estimate that "above-potential growth will likely push
down the unemployment rate to 3.2% at end-2019, where it could remain through
2020," while "core inflation should pick up gradually as labor markets tighten
further and the economy runs beyond potential."
Calendar of next week's market events (prior, estimate):
- Sep 24 Sep Dallas Fed manufacturing index (30.9, --) 1030ET
- Sep 24 US Tsy $48B 13W bill auction (CUSIP 912796QQ5) 1130ET
- Sep 24 US Tsy $42B 26W bill auction (CUSIP 912796PX1) 1130ET
- Sep 24 US Tsy $37B 2Y Note auction (CUSIP 9128285B2) 1300ET
- Sep 24 Sep Treasury Allotments (p) 1500ET
- Sep 25 Sep Philadelphia Fed Nonmfg Index (41.7, --) 0830ET
- Sep 25 22-Sep Redbook retail sales m/m (0.3%, --) 0855ET
- Sep 25 Jul FHFA Home Price Index (0.2%, --) 0900ET
- Sep 25 Jul Case-Shiller Home Price Index (0.1, --) 0900ET
- Sep 25 Sep Richmond Fed Mfg Index (24, --) 1000ET
- Sep 25 Sep Conference Board confidence (133.4, 131.7) 1000ET
- Sep 25 Sep Dallas Fed services index (21.5, --) 1030ET
- Sep 24 US Tsy $38B 5Y Note auction (CUSIP 9128285D8) 1300ET
- Sep 25 FOMC policy meeting kicks off
- Sep 26 21-Sep MBA Mortgage Applications (1.6%, --) 0700ET
- Sep 26 Aug new home sales (627k, 627k) 1000ET
- Sep 26 Aug bldg permits revision 1000ET
- Sep 26 21-Sep crude oil stocks ex. SPR w/w 1030ET
- Sep 26 FOMC policy announcement 1400ET
- Sep 26 Summary Economic Projections press conference 1430ET
- Sep 27 22-Sep jobless claims (201k, 222k) 0830ET
- Sep 27 Q2 GDP (3rd) (4.2%, 4.2%) 0830ET
- Sep 27 Q2 GDP Price Index (3.0%, 3.0%) 0830ET
- Sep 27 Aug durable goods new orders (-1.7%, 2.0%) 0830ET
- Sep 27 Aug durable new orders ex transport (0.2%, 0.5%) 0830ET
- Sep 27 Aug advance goods trade gap (-$72.2B, --) 0830ET
- Sep 27 Aug advance wholesale inventories 0830ET
- Sep 27 Aug advance retail inventories 0830ET
- Sep 27 23-Sep Bloomberg comfort index 0945ET
- Sep 27 Aug NAR pending home sales index (106.2, --) 1000ET
- Sep 27 21-Sep natural gas stocks w/w 1030ET
- Sep 27 Sep Kansas City Fed Mfg Index (14, --) 1100ET
- Sep 24 US Tsy $31B 7Y Note auction (CUSIP 9128285C0) 1300ET
- Sep 27 Aug farm prices 1500ET
- Sep 27 Fed Chair Powell on economy at Senate event (1630ET)
- Sep 27 26-Sep Fed weekly securities holdings 1630ET
- Sep 28 Aug personal income (0.3%, 0.4%) 0830ET
- Sep 28 Aug current dollar PCE (0.4%, 0.4%) 0830ET
- Sep 28 Aug total PCE price index (0.1%, 0.2%) 0830ET
- Sep 28 Aug core PCE price index (0.2%, --) 0830ET
- Sep 28 Sep ISM-Milwaukee Mfg Index (64.63, --) 0900ET
- Sep 28 Sep MNI Chicago PMI (63.6, 62.0) 0945ET
- Sep 28 Sep Michigan sentiment index (f) (100.8, 100.8) 1000ET
- Sep 28 Q3 St. Louis Fed Real GDP Nowcast ( %, --) 1100ET
- Sep 28 Q3 NY Fed GDP Nowcast ( %, --) 1115ET
- Sep 28 16/17 grain stocks 1200ET
- Sep 28 NY Fed Pres Williams, "Reserve Reductions, Money Markets, and Future
Frameworks", Columbia University School of Int/Pub Affairs, Q&A. 1645ET
--MNI Chicago Bureau; tel: +1 312-431-0089; email: firstname.lastname@example.org
--MNI Washington Bureau; tel: +1 202-371-2121; email: email@example.com