What’s on the Agenda for this Week?
The three areas that have the greatest ability to impact backend pricing this week are: (1) Stimulation Nation, (2) Inflation Nation and (3) The Talking Fed.
(1) Stimulation Nation: The size of the next stimulus bill would appear to be at or near the proposed $1.9T. The House basically passed a “blank check” budget on Friday. With its passage, they will now (after the fact) draft the details of the stimulus component of the budget in their committees. It would then go to the Senate where the reconciliation process would begin. Any clarification of the timeline and firm details on the stimulus size and scope will have a big impact on pricing.
(2) Inflation Nation: It is a very light economic calendar this week, the biggest report is Wednesday’s Consumer Price Index. The Core (ex food and energy) CPI reading is a key measure of inflation. While it is expected to remain well below the important 2% level, the higher the reading is, the worse it is for pricing, the lower the number is, the better it is for pricing.
(3) The Talking Fed: Fed Chair Powell will speak on Wednesday afternoon. Any comments on stimulus, rates and asset purchases can have a big impact on the markets.
This is another record-breaking week in terms of the size of the debt being offered up in the market.
02/11: 3 year note
02/12: 10 year note
02/13: 30 year bond.
There were no domestic events today.
On Deck for Tomorrow: NFIB Business Optimism Index, JOLTS, 3-year Treasury note auction.
Across the Pond
Germany: Industrial Production 0.0% vs. estimates of 0.3%.