Now that the global financial system is down to living literally auction to auction, with negligible available cash and deficits as far as the eye can see, not to mention a European continent living day to day on the whims of either political extreme, issuance of government paper, and particularly its proper uptake, takes takes on a especially significant role. Below we present not only Goldman's summary of the key events in the past week as well as those in the next 5 days, but a bond auction schedule, together with a POMO summary, for the next two weeks.With everyone selling as much paper as they can wet away it, not even the global central banking cartel selling unlimited long term puts on the worldwide treasury curve will do much to prevent the upcoming global yield tsunami.
Source: Morgan Stanley:
Next, Goldman summarizes the past week, and forecast the next 4 business days (Friday is a holiday)
What Matters in FX This Week : Business Surveys in Europe and Turkish Central Bank Meeting
From a macro perspective, last week’s data offered a slightly more positive mix of growth vs. inflation. CPI data in the US showed a more moderate increase in core inflation, while consumer confidence in the US came in slightly better than expected and long-term inflation expectations eased.?
In terms of our own market views, we re-emphasized our Dollar bearish bias in the FX Monthly but also highlighted that limited further upside in European rates together with slightly more volatile risk sentiment could temporarily hurt our long EUR/US $ exposure. Our commodities strategy team turned more neutral in the near term for oil, and as a result, we closed our long recommendation in Canadian equities.
The week ahead is reasonably light on data. The European PMIs and the German IFO will be the key releases to watch. So far, these forward-looking growth indicators have remained steady at remarkably high levels, and it will be interesting to watch whether it extends for another month.?
As a result of our more neutral stance on oil, we are watching our RUB trade closely. If the CBR remains hawkish then there is room for RUB to continue to perform even if oil prices correct lower in the near term. Therefore, watching next week’s investment data is key for our view on the economy and the central bank’s next move.?
Next week’s central bank meeting in Turkey is unlikely to provide a negative backdrop for our long EURTRY recommendation as we do not expect CBRT to raise reserve requirements again.?
Monday 18 April?
RBA Board Meeting Minutes.?
Hungary Monetary Policy Meeting: We expect the National Bank of Hungary to keep rates unchanged at 6%.?
Also of interest: Poland wages, US homebuilders’ survey, Singapore trade balance. Fed speeches by Bullard, Fischer & Lockhart.?
Tuesday 19 April?
Eurozone Flash PMIs (Apr): We expect the manufacturing PMI to print at 57.2, very close to last month’s print (of 57.5). Similarly for the services PMI we expect 57, which would be slightly below last month’s 57.2 print.
Russia Investment Statistics (Mar): The strength of the rebound in domestic demand will be important to watch in order to assess the odds for further monetary tightening in the near term in Russia. Our long RUB basket recommendation is predicated on a hawkish CBR stance.?
US Housing Starts (Mar): We expect a 5% increase in starts vs consensus forecasts of 9.6%.?
Also of interest: Canada CPI (Mar), Japan trade balance (Mar), Hungary Wages (Feb), Poland IP (Mar).?
Wednesday 20 April?
Thailand Central Bank Meeting: We expect a 25bp hike of the policy rate to 2.75%, on the back of rising inflationary pressures.?
Taiwan Export Orders (Mar): The March 11 earthquake in Japan is likely to distort export numbers across the region.?
Sweden MPC Meeting: We expect the Riksbank to hike rates by 25bps to 1.75%. This is in line with consensus expectations.?
UK MPC Meeting Minutes: It would be a surprise if any committee member had switched votes between March and April.?
US Existing Home Sales (Mar): We forecast a decline of 6% mom vs a 2.5%mom increase that consensus expects.?
Also of interest: South Africa Retail Sales, Mexico INPC inflation.?
Thursday 21 April?
Germany IFO (Apr): We will be watching whether the IFO continues to point to substantial strength in the German manufacturing sector. The components will also be of interest in terms of assessing the course for business expectations and current trends in the retail and wholesale sectors.?
Turkey Monetary Policy Meeting: We expect the Bank to leave rates unchanged at 6.25%. We do not expect the bank to hike reserve requirements (RRR).?
Japanese Portfolio Flow data for the week ending April 15. The last data set showed large Japanese selling of foreign debt. In comparison to previous years, we think it is related to fiscal year end. If the trend continues, it may signal repatriation of foreign assets in response to last month’s earthquake.?
US Philly Fed (Apr): We expect the Philly Fed indicator to decline to 33 from 43.4, consensus expects a decline to 36 only.
Also of interest: US initial claims?, Canada retail sales.
Friday 22 April?
Of interest: Hungary Retail Sales