Today's Economic Data Highlights

Twin deficit day, with import and export prices and consumer confidence sandwiched in between. At 2pm today we get the next POMO schedule, which will likely be larger than the $105 billion purchased in November-December due to a greater amount of MBS prepays. Furthermore, as there is no bond issuance in the next several weeks, the net effect will be a substantial demand squeeze as there is no incremental supply. The Fed will surpass $1 trillion in UST holdings within 10 days.
 
8:30: The US trade balance for Oct…will it shrink further?  Our best estimate is that the trade balance narrowed significantly in October, mostly on the import side.  Imports have been abnormally high in recent months.  However, yesterday’s report of another large increase in wholesale inventories—often the first statistical stop for imports—suggests some upside risk to our estimate.
Median forecast (of 78) -$44bn, ranging from -$46.6bn to -$39.5bn; last -$44.0bn.
 
8:30: Import/export price indexes for Nov….another large increase?  Analysts estimate that the import price index rose by another large amount last month as crude oil prices continued to climb.  Excluding petroleum, we will be interested in whether the larger increase reported for October (+0.4% vs. a 2.7% trend) continued into November.
Median forecast (of 53): +0.8%, ranging from +0.3% to +1.6%; last +0.9%.
 
10:00 (9:55 to subscribers): Reuters/University of Michigan consumer sentiment for Dec (prelim)…another small increase?  The median forecast for this index is slightly higher than the final figure reported for November.  The median expectation for inflation five to ten years ahead remained at 2.8%, the same as in October.
Median forecast (of 67): 72.5, ranging from 69 to 76.5; last 71.6 (Nov final).
 
14:00: The US budget balance for Nov…slightly better than a year ago, once corrected for calendar quirks.  The CBO estimates that the US Treasury ran a $142bn deficit in November.  While this is much higher than the $120bn shortfall reported a year ago, the difference is entirely accountable to shifts in the calendar, which often push payments from one month into another.  Excluding this factor, the agency estimates a $4bn narrowing relative to one year earlier.
CBO -$142bn; median forecast (of 25) -$138bn, ranging from -$145bn to -$110bn; last (Aug 2009): -$120.3bn.

compiled using Goldman data

Comments

[David99]

Very good highlights but how the market will react without POMO today, in red or green?

[TexDenim]

New POMO schedule is probably what is keeping ES licking its chops and nipping at 1040 right now. Monopoly money to push equities higher. What a joke.

[99er]

Charts

http://www.zerohedge.com/forum/99er-charts

Good luck!