A bunch of big deficit numbers today (trade and budget, the latter expected to confirm that the Treasury is in desperate need of cutting spending), and even more Fed speeches signifying nothing but attempting to confuse even more. Most importantly, the Fed will announce the latest POMO schedule at 2:00PM EST.
8:30: Import/export price indexes (March). Higher commodity prices. The rise in commodity prices should result in a sizable increase in overall US import prices. However, we expect that inflation in imports of finished consumer goods remained moderate.
Median forecast (of 50): +2.1%; last +1.4%.
8:30: US trade balance (February). Chinese New Year effect reverses. Our research suggests that US trade statistics do not correctly account for shifts in the timing of the Chinese New Year holiday (see Andrew Tilton. “US Trade Balance Bounces into the Year of the Rabbit,” US Daily, April 6, 2011). We believe this was the cause of the exceptionally strong growth in real imports reported in January. For February, the effect should reverse, leading to a marked improvement in the real trade balance.
Median forecast (of 71) -$44.0bn; last -$46.3bn.
9:15: Kansas City Fed President Thomas Hoenig speaks on regulatory issues. He is not currently a voting member of the FOMC.
14:00: The US budget balance (March). The CBO estimates that the March budget deficit increased by $124bn from the same month last year. The deterioration reflects technical factors, rather than a fundamental deterioration in government finances (last March, the Treasury made a one-time accounting change to the projected cost of the TARP).
CBO -$189bn; median forecast (of 28) -$189bn; last (March 2010): -$65.4bn.
14:00: New York Federal Reserve to announce size and distribution of latest POMO schedule. Important here will be how much the Fed expects QE Lite will contribute: recent MBS repurchases have slowed drastically which means April-May could be the lowest QE total amount so far.
14:15: Federal Reserve Governor Daniel Tarullo testifies on regulatory issues.
14:50: Dallas Fed President Richard Fisher moderates panel discussion on “How Does an Economy Grow?” Mr. Fisher is a voting member of the FOMC this year.
From Goldman and Zero Hedge