US Credit Mkt Wk Ahd: Fed Speak, Trade Watch, Supply And Data

     CHICAGO (MNI) - Tail-risks remain, growing anxiety over trade-wars as a

byproduct of import tariffs with China and other countries. 

     It's a shortened week ahead with markets closing early Thursday and closed

on Friday ahead Easter Sunday.

     After a slow start, data picks up on Wednesday with Q4 GDP Price Index

(2.3% prior, 2.3% est) and Feb advance goods trade gap and wholesale/retail

inventories.

     Thursday's shortened session sees the heaviest flurry of data with weekly

claims (225k est., down from 229k prior), personal income steady at 0.4%,

current dollar PCE steady at 0.2%, the core PCE price index up 0.2%, Mar MNI

Chicago PMI (63.3 est., up from 61.9 prior), ISM-Milwaukee Mfg Index and

Bloomberg comfort index.  

     The Federal Reserve came out of their media blackout late last week, at

least one Fed president will be fielding questions at daily speaking events from

Monday through Thursday.

     BNP Paribas economists highlight the upcoming Fed-speak and trade risks

following President Trump's announcement of $50-$60B in tariffs on Chinese

imports.

     "Seven Fed officials are currently scheduled to speak next week," BNP said,

composed of a "mix of doves (Kashkari), dovish-leaning (Bostic), centrists

(Kaplan, Harker, Dudley), hawkish-leaning (Rosengren), and hawks (Mester)." 

     "Likely on the agenda are their views on the Committee's median forecast

changes, which were notable in a few aspects, among them having inflation

above-target for 2019 and 2020 and the unemployment rate at a sustained 3.6% in

2019 and 2020."

     Last week's tariff announcement was long on words but short on specifics,

U.S. Trade officials said the action was "to get China to modify 'unfair' trade

practices" with the "initial list of goods that could be subject" to the tariffs

totaling "$50B in Chinese exports" many of which "China sought to acquire

advantage through unfair acquisition of forced technology transfer from U.S.

companies".

     President Trump said the Trade Office will publish the list within 15 days

while they have 60 days to "propose actions beyond CFIUS" (Committee on Foreign

Investment in the United States) "to address concerns about unfair acquisitions

by China of investments in the U.S.".

     Meanwhile, President Trump directed Treasury Secretary Mnuchin to "pursue

dispute settlement" with the World Trade Organization (WTO) to "address China's

discriminatory licensing practices." The irony of the latter is that China

granted over three dozen trademarks to President Trump in early March 2017 after

a decade of legal battles seeking them.

     BNP noted the US also "announced that it would exempt a large group of

trading partners, including the EU, Brazil, South Korea, and Brazil, from its

recently announced steel and aluminum tariffs. It had previously announced that

Canada and Mexico would be exempted as well."

     On data, BNP highlights February personal income and spending report,

"which includes the FOMC's choice inflation measure, the PCE price index."

     "As the FOMC noted in its March statement, household spending has moderated

from its Q4 2017 pace in recent months. For February, we expect a solid print

that sees personal income rising 0.4% m/m and personal spending increasing by

0.3% m/m, though given our expectation for headline PCE prices to rise 0.2% m/m,

that would leave real personal spending up just 0.1% m/m."  

     JP Morgan economists view the upcoming week's data more "secondary and

tertiary in nature." However, the "March employment report is due out the first

week in April, our work has shown that inflation data surprises have mattered

more for Treasury yields than employment over the past year or so, and the next

CPI print is nearly three weeks away."

     Morgan Stanley economists "expect a strong increase of 0.5% in personal

income on the back of the very robust job growth in the February employment

report." 

     Regarding personal spending MS looks "for a more muted gain of 0.1% in the

wake of another disappointing retail sales report. Incorporating this month's

CPI and PPI inputs, we forecast a 0.20%increase for February core PCE inflation,

which just raises the year-over-year rate to 1.6% from 1.5% (1.55% vs. 1.52% in

January). Headline PCE inflation should rise 0.16%, keeping the year/year rate

at 1.7%."

     Aside from trade, data and Fed-speak, the following week sees the latest

round of Treasury sales:

US TSY TO SELL $30.000 BLN 2Y NOTES MAR 26, SETTLE APR 02

US TSY TO SELL $35.000 BLN 5Y NOTES MAR 27, SETTLE APR 02

US TSY TO SELL $29.000 BLN 7Y NOTES MAR 28, SETTLE APR 02

US TSY TO SELL $15.000 BLN 1Y-10M FRN MAR 28, SETTLE APR 02

--

US TSY TO SELL $51.000 BLN 13W BILL MAR 26, SETTLE MAR 29

US TSY TO SELL $45.000 BLN 26W BILL MAR 26, SETTLE MAR 29

US TSY TO SELL $24.000 BLN 52W BILL MAR 27, SETTLE MAR 29

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): 

- Mar 26 Dallas Fed manufacturing index (37.2, --) 1030ET

- Mar 26 $51B Tsy 13W bill auction, Mar 29 settle 1130ET

- Mar 26 $45B Tsy 26W bill auction, Mar 29 settle 1130ET

- Mar 26 $30B Tsy 2Y note auction, Apr 2 settle 1300ET

- Mar 26 Clev Fed Pres Mester Julis-Rabinowitz Center for Public Policy &

Finance at Princeton Univ, New Jersey, audience Q&A. 1630ET

- Mar 27 24-Mar Redbook retail sales m/m  (-0.1%, --) 0855ET

- Mar 27 Jan Case-Shiller Home Price Index (0.6, --) 0900ET

- Mar 27 Richmond Fed Mfg Index (28, --) 1000ET

- Mar 27 Conference Board confidence (130.8, 132.0) 1000ET

- Mar 27 Dallas Fed services index (17.5, --) 1030ET

- Mar 27 Atl Fed Pres Bostic, Talk w/John Hope Bryant, HOP Flobal Forums, '18

ann meet, Atlanta. 1100ET

- Mar 27 $24B Tsy 52W bill auction, Mar 29 settle 1130ET

- Mar 27 $35B Tsy 5Y note auction, Apr 2 settle 1300ET

- Mar 28 23-Mar MBA Mortgage Applications (-1.1%, --) 0700ET

- Mar 28 Q4 GDP (3rd) (2.5%, 2.7%) 0830ET

- Mar 28 Q4 GDP Price Index (2.3%, 2.3%) 0830ET

- Mar 28 Feb advance goods trade gap (-$76.5, --) 0830ET

- Mar 28 Feb advance wholesale inventories (0.8%, --) 0830ET

- Mar 28 Feb advance retail inventories (0.7%, --) 0830ET

- Mar 28 Feb NAR pending home sales index (104.6, --) 1000ET

- Mar 28 23-Mar crude oil stocks ex. SPR w/w (-2.62m bbl, 1030ET

- Mar 28 Atl Fed Pres Bostic chat Atl Soc Fin & Inv Prof's, audience Q&A. 1130ET

- Mar 28 $29B Tsy 7Y note auction, Apr 2 settle 1300ET

- Mar 28 $15B Tsy 1Y-10M FRN auction, Apr 2 settle 1300ET

- Mar 28 Feb farm prices (-6.2%, --) 1500ET

- Mar 29 24-Mar jobless claims (229k, 225k) 0830ET

- Mar 29 Feb personal income (0.4%, 0.4%) 0830ET

- Mar 29 Feb current dollar PCE (0.2%, 0.2%) 0830ET

- Mar 29 Feb total PCE price index (0.4%, --) 0830ET

- Mar 29 Feb core PCE price index (0.3%, 0.2%) 0830ET

- Mar 29 Mar ISM-Milwaukee Mfg Index (75.24, --) 0900ET

- Mar 29 Mar MNI Chicago PMI (61.9, 63.3) 0945ET

- Mar 29 25-Mar Bloomberg comfort index  0945ET

- Mar 29 Mar Michigan sentiment index (f) (102.0, 102.0) 1000ET

- Mar 29 23-Mar natural gas stocks w/w 1030ET

- Mar 29 16/17 grain stocks 1200ET

- Mar 29 Phi Fed Pres Harker, outlook NY Assn of Bus Econ Luncheon, Q&A. 1300ET

- Mar 29 28-Mar Fed weekly securities holdings 1630ET

- Mar 30 Q1 St. Louis Fed Real GDP Nowcast (3.79%, --) 1100ET

- Mar 30 Q1 NY Fed GDP Nowcast (2.9%, --) 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$]