What’s Happening this Week?
Domestic Flavor
Taking it to the House: Weekly Mortgage Applications dropped by -5.1%. Purchase Applications fell by -6.0% and Refinance Applications fell by -5.0%. The February NAHB Housing Market Index was higher than expected, 84 vs. estimates of 83.
Retail Sales: The January Retail Sales showed a big increase with a MOM change of 5.3% vs. estimates of 1.1%. Ex-Autos, the gains were equally impressive: 5.9% vs. estimates of 1.0%.
Inflation Nation: The Producer Price Index in January was much higher than expected with a MOM change of 1.3% vs. estimates of 0.4%. The Core (Ex food and energy) gained 1.2% vs. estimates of 0.2%.
Manufacturing: Industrial Production in January was much higher than expected, 0.9% vs. estimates of 0.5% and Capacity Utilization also beat to the upside 75.6% vs. estimates of 74.38%.
Treasury Dump: There is an important 20-year Treasury bond auction today.
The Talking Fed
Barkin, Rosengren and Kaplan will speak today but the focus will be on the release of the Minutes from the last FOMC meeting.
Market Wrap-up
Domestic Flavor:
Taking it to the House: Weekly Mortgage Applications dropped by -5.1%. Purchase Applications fell by -6.0% and Refinance Applications fell by -5.0%. The February NAHB Housing Market Index was higher than expected, 84 vs. estimates of 83.
Retail Sales: The January Retail Sales showed a big increase with a MOM change of 5.3% vs. estimates of 1.1%. Ex-Autos, the gains were equally impressive: 5.9% vs. estimates of 1.0%.
Inflation Nation: The Producer Price Index in January was much higher than expected with a MOM change of 1.3% vs. estimates of 0.4%. The Core (Ex food and energy) gained 1.2% vs. estimates of 0.2%.
Manufacturing: Industrial Production in January was much higher than expected, 0.9% vs. est. of 0.5% and Capacity Utilization also beat to the upside 75.6% vs. estimates of 74.38%.
On Deck for Tomorrow: Initial Weekly Jobless Claims, Philly Fed Manufacturing, Import and Export Prices, Housing Starts and Building Permits.
Treasury Dump
There was an important 20-year Treasury bond auction today. $27B went off at a high yield of 1.920% and a bid-to-cover ratio of 2.15.
The Talking Fed
The Minutes from the last FOMC meeting were issued. You can read the official release here.
Here are a few highlights, although there was nothing new in the Minutes that we have not heard from various Fed district presidents over the past month:
• “Participants noted that economic conditions were currently far from the Committee’s longer-run goals and that the stance for policy would need to remain accommodative until those goals were achieved,” the meeting summary said. “Consequently, all participants supported maintaining the Committee’s current settings and outcome-based guidance for the federal funds rate and the pace of asset purchases.” • With the economy continuing to shake off the effects from the Covid-19 pandemic, the committee, which sets monetary policy for the Federal Reserve, kept policy unchanged.