The Week The Fed Loses "Patience" - Previewing This Week's Main Events

This week's main event will be the FOMC announcement on Wednesday at 2:00 pm and the subsequent press conference, the conclusion of the March 2-day Fed meeting, in which it is widely expected that Yellen will announce the end of the Fed's "Patience" with an economy in which resurgent waiters and bartenders continue to skew the job market even if it means consistently declining wages for 80% of the US labor force.

Here is a summary of what else to expect this week from DB:

• On Monday, we’ve got the industrial and manufacturing production prints, March reading for empire manufacturing (just out and missed) and also the capacity utilization reading for February.
• On Tueday, the calendar picks up a bit and we start in Japan with the BoJ monetary policy meeting which are becoming interesting given some hints of policy tensions in the council. Focus in Europe will be on the final February CPI readings for the Euro-area as well as the ZEW survey out of both the Euro-area and Germany. Employment data out of the Euro-area is also due on Tuesday morning. The main focus however will of course be the start of the FOMC meeting in the US on Tuesday. Data prints in the US on Tuesday include the February housing starts and building permits.
• We kick off Wednesday with trade data out of Japan. Closer to home, the (pre-election) Budget, BoE minutes and various employment indicators in the UK will be a big focus, whilst trade data for the Euro-area rounds off the prints in the morning. The conclusion of the FOMC will of course be the key event for markets along with the associated Yellen press-conference shortly after.
• There is little in the way of releases for Europe and Asia on Thursday with focus instead on the US where we get trade data, jobless claims, the leading index and the Philadelphia Fed business outlook.
• We finish the week on Friday with PPI due for Germany, and net borrowing data due out of the UK. Its quiet data-wise in the US on Friday with no releases due however we’ll keep an eye on the Fed’s Evans and Lockhart who are both due to separately speak on monetary policy.

A summary of only US events from BofA:

And finally, the full breakdown from Goldman:

In DMs, highlights of next week include US FOMC, Philly Fed, IP and CA; MP Decision in Japan, Norway and Switzerland; Minutes in Australia and UK; Eurozone CPI; Japan Trade; New Zealand GDP.

• [Monday] US IP.
• [Tuesday] Eurozone CPI; Japan MP Decision; Australia Minutes.
• [Wednesday] US FOMC; Eurozone Trade Balance; UK Minutes; Japan Trade Balance.
• [Thursday] US Philly Fed and CA; MP Decision in Norway and Switzerland; New Zealand GDP.
• [Friday] Canada CPI.

In EMs, highlights of next week include MP Decisions in Indonesia, Turkey, Chile and Colombia; Poland Minutes; GDP in Ukraine, Argentina, Chile and Colombia; Economic Activity in Brazil and Peru; CPI in Malaysia, Poland and South Africa; Brazil Inflation; India Wholesale Prices.

• [Monday] India Wholesale Prices; Poland CPI; Economic Activity in Brazil and Peru.
• [Tuesday] MP Decision in Indonesia and Turkey; Colombia GDP.
• [Wednesday] CPI in Malaysia and South Africa; Ukraine IP; Chile GDP.
• [Thursday] Poland Minutes; Chile MP Decision.
• [Friday] GDP in Ukraine and Argentina; Brazil Inflation; Colombia MP Decision.

Monday, March 16

Events: Speeches by ECB’s Costa, Draghi and Lautenschlaeger and RBA’s Debelle.

• United States | [MAP 2] Industrial Production MoM (Feb): GS 0.30%, consensus 0.30%, previous 0.20%
• United States | [MAP 2] Empire Manufacturing (Mar): Consensus 8, previous 7.78
• United States | [MAP 1] NAHB Housing Market Index (Mar): Consensus 57, previous 55
• United States | Capacity Utilization (Feb): GS 79.40%, consensus 79.50%, previous 79.40%
• India | Wholesale Prices YoY (Feb): Consensus -0.80%, previous -0.39%
• Poland | CPI Core YoY (Feb): Consensus 0.50% (0.00% mom), previous 0.50% (0.00% mom)
• Brazil | [MAP 5] Economic Activity YoY (Jan): GS (0.35% mom), previous 0.65% (-0.55% mom)
• Peru | [MAP 5] Economic Activity YoY (Jan): Consensus 1.80%, previous 0.50%
• Also interesting: [DM] US Total Net TIC Flows; UK Rightmove House Prices; Philippines Overseas Workers Remittances [EM] India and Indonesia Trade Balance; Turkey Unemployment; CA in Czech Republic and Poland; Peru Unemployment.

Tuesday, March 17

Events: Speeches by BOJ’s Kuroda, ECB’s Praet and Nouy and Riksbank’s Skingsley.

• United States | [MAP 1] Housing Starts (Feb): Consensus 1040K, previous 1065K
• United States | Housing Starts MoM (Feb): GS -6.5%, consensus -2.40%, previous -2.00%
• Eurozone | CPI YoY (Feb F): GS -0.30%, consensus -0.30% (0.60% mom), previous (r) -0.60% (-1.60% mom)
• Eurozone | CPI Core YoY (Feb F): GS 0.60%, consensus 0.60%, previous 0.60%
• Japan | MP Decision: We expect the BOJ to maintain current monetary policy at its March 16-17 meeting. The core CPI slowed to +0.2% yoy excluding tax hike effect) in January (December: +0.5%). However, the BOJ has sounded a cautionary tone on its price outlook since January, saying CPI yoy growth is likely to slow for the time being, reflecting the decline in energy prices. At the current juncture, we believe the BOJ has no incentive to opt for additional easing.
• Australia | Minutes from MP Decision
• Singapore | [MAP 4] Non-oil Domestic Exports YoY (Feb): Previous 4.30%
• Indonesia | MP Decision: We expect BI to keep rates on hold at its policy meeting on account of still elevated headline inflation. Despite the softening in HCPI to 6.3% yoy, it remains above the upper limit of the central bank’s inflation target of 5%. Core inflation also remains relatively elevated at 5%.
• Nigeria | CPI YoY (Feb): GS 8.4%, consensus 8.50%, previous 8.20%
• Turkey | MP Decision: We expect all rates on hold and for the MPC to retain cautious language.
• Colombia | [MAP 5] GDP YoY (4Q): GS 3.80% (0.70% qoq), previous 4.20% (0.60% qoq)
• Also interesting: [DM] US Building Permits; Eurozone Employment; ZEW Survey Expectations in the Eurozone and Germany; Norway Trade Balance; Spain Labor Costs; Japan Leading and Coincident Indices [EM] Hong Kong Unemployment; South Africa CA; Brazil IGP-10 Inflation.

Wednesday, March 18

Events: Speeches by Fed’s Yellen, ECB’s Coeure and Riksbank’s Ingves; UK annual budget.

• United States | MP Decision: Largely in response to the improvement in labor market conditions, the FOMC is likely to drop its current forward guidance that it will “be patient in beginning to normalize the stance of monetary policy” from the March statement. It appears likely the language used in Chair Yellen’s Congressional testimony last month provides a strong hint about how the forward guidance will be revised. In particular, we expect the paragraph currently containing the “patient” guidance to be modified.
• Eurozone | Trade Balance SA (Jan): Consensus 21.5B, previous 23.3B
• United Kingdom | [MAP 4] ILO Unemployment Rate 3Mths (Jan): GS 5.60%, consensus 5.70%, previous 5.70%
• United Kingdom | Minutes from MP Decision
• Japan | Trade Balance (Feb): GS - ¥940.0B, consensus - ¥1190.0B, previous (r) - ¥1179.1B
• Malaysia | CPI YoY (Feb): Consensus 0.00%, previous 1.00%
• Poland | [MAP 3] Sold Industrial Output YoY (Feb): Consensus 4.10% (0.60% mom), previous 1.70% (-3.10% mom)
• South Africa | CPI YoY (Feb): GS 3.4%, consensus 3.90%, previous 4.40% (-0.20% mom)
• Ukraine | Industrial Production YoY (Feb): Consensus -21.30%, previous -21.30% (-19.70% mom)
• Chile | [MAP 5] GDP YoY (4Q): GS 1.80% (1.00% mom), consensus 1.90%, previous 0.80% (0.40% mom)
• Also interesting: [DM] US MBA Mortgage Applications; Eurozone Construction Output; Italy Trade Balance; United Kingdom Claimant Count Rate and Jobless Claims Change; Australia Westpac Leading Index; New Zealand CA [EM] China NBS 70-city housing price; South Korea Unemployment; Poland Retail Sales; Chile CA.

Thursday, March 19

Events: Speeches by Swiss National Bank’s Jordan.

• United States | [MAP 4] Philadelphia Fed Business Outlook (Mar): GS 7.0, consensus 8, previous 5.2
• United States | Current Account Balance (4Q): Consensus -$102.0B, previous -$100.3B
• Norway | MP Decision: We expect further easing on the back of the fall in oil prices since December.
• Switzerland | MP Decision
• New Zealand | GDP YoY (4Q): GS 3.40% (0.80% qoq), consensus 3.40% (0.80% sa qoq), previous 3.20% (1.00% (sa qoq)
• Hong Kong | Composite Interest Rate (Feb): Previous 0.36%
• Poland | Minutes from MP Decision
• Chile | MP Decision: We expect rates on hold (Overnight Rate Target at 3.00%, in line with consensus) for the fifth consecutive month in March and to reiterate a broadly neutral bias. Nevertheless, we would not be surprised if the policy statement contains some new hawkish undertones, consistent with the directors’ reiterated concerns about the persistent increase in core inflation measures.
• Also interesting: [DM] US Initial Jobless and Continuing Claims and Leading Index; Euro area Construction; Switzerland Trade Balance; Japan All Industry Activity Index; Australia RBA FX Transactions Market [EM] Philippines BoP Overall; Russia Unemployment and Retail Sales.

Friday, March 20

Events: Speeches by BOJ’s Kuroda, Fed’s Lockhart and Evans and RBA’s Stevens; Quarterly Thailand Monetary Policy Report.

• Canada | CPI YoY (Feb): Consensus 0.90%, previous 1.00% (-0.20% sa mom)
• United Kingdom | Public Sector Net Borrowing (Feb): GS 7.5B, consensus 7.8B, previous -9.4B
• Hong Kong | CPI Composite YoY (Feb): Previous 4.10%
• Ukraine | GDP YoY (4Q F)
• Argentina | [MAP 5] GDP YoY (4Q): GS 0.30% (0.60% qoq), previous -0.80% (-0.50% qoq)
• Brazil | IBGE Inflation IPCA-15 YoY (Mar): GS 7.92% (1.25% mom), previous 7.36% (1.33% mom)
• Colombia | MP Decision: We expect rates on hold (Overnight Lending Rate at 4.50%, in line with consensus), and we expect the policy statement will contain some new hawkish remarks, reflecting the surprising spike in inflation in February. In addition, we do not rule out the possibility that the MPC may soon announce some measure to reduce the volatility in the FX market.
• Also interesting: [DM] Canada Retail Sales; CA in Eurozone and Italy; Spain Trade Balance; New Zealand ANZ Job Advertisements and Consumer Confidence [EM] Malaysia Foreign Reserves; Taiwan Export Orders; Argentina Current Account; Colombia Trade Balance; Mexico Retail Sales

Source: DB, BofA, Goldman

Comments

[philipat]

It seems to me that

[negative rates]

I'm gonna pull a rear end, cash some checks, do some painting, transplant some plants, and wait for the bank to tell me I don't owe um any money.

[SoilMyselfRotten]

Fed loses patience as we lose our lunch

[philipat]

Sorry. The ether lost most of my above post and today the edit function is doing its no edit thing!!

What I wanted to say was that it seems to me that either way The Fed has lost all credibility. We are still at the "Jawboning" phase but IF they hike and the economy enters a new recession, they will loose all credibility. If they don't hike, after already over a year of "Threats" they will also loose all credibility when the economy goes into recession anyway (So why were they ever even talking about raising rates anyway?)

I believe that The Fed was trying to create a window to hike so as to demonstrate that they were "Ahead of the curve" but got the timing wrong by waiting too long (Not that a single 0.25% hike would actually have proved they were ahead of the curve anyway) It is significant that the only macro data which "Beat" was the data manufactured entirely within Government, such as the BLS data for example, all designed to give The Fed the opportunity to hike despite the predominace of macro data missing. But they dithered too long and now deserve their fate.

And, in this context, the only reason that the word "Patience" even matters is because there are no more Free Markets and everything is controlled and manipulated by The Fed and Wall Street. Until it isn't.

So, let the fun begin......

[Hohum]

Credibility isn't important.  Market players just want the Fed to keep policy ultra easy.  Do what I want, nothing else.

[NihilistZero]

If a .25% hike by the Fed is enough to send (or he blamed for sending) the economy into a recession, we don't have a REAL economy by any definition. Of course those on Zerohedge know this already, but I suspect some will still he shocked at this revelation. As for the FED, I truly believe they are in their last days. They may exist for many years more but their ability to directly influence the economy is at an end. Audit or no, expect the self serving Congress to curtail much of the FED's power and independence after Mr Yellen is unable to explain how the FED couldn't stop/see-coming/fix the next clusterfuck.

[Pool Shark]

If you thought a strong US$ was already hurting the US economy; just wait 'till Yellen raises rates this week...

Yep, here comes that rate hike...

Just a couple days now...

Get ready...

Here come that hike...

You can count on it...

[mayhem_korner]

Just the suggestion of raising rates will have the same effect in the ensuing 48-72 hours as actually doing it.  The HFT algos are so programmed, that Fedwords are a full-proof test balloon.

The only (twisted) theory that I can come up with as to why they would raise rates anytime soon is that it might give them some ground cover to later return to QE. 

[NihilistZero]

I think QE is done for the foreseeable future. First and foremost it doesn't work and only speeds up the destruction of every single non financial industry in the Country. Secondly there's not much left for them to buy. Nobody is taking on mortgages. I guess there's always corporate bonds used for stock buybacks to push shares higher, but at this point I think the FED knows they can't continue that dangerous game without a total carnage crash when the market final goes bear. Pushing on a string is putting it mildly. The FED is looking very impotent moving forward.

[negative rates]

Look at that, a Quartermane predicting the future.

[Dewey Cheatum Howe]

That they call it "Empire Manufacturing" and it's placement on top of the list should tell you all you need to know.

[jtz5]

"Patient" to be replaced with tolerant, resigned, calm, composed, even-tempered or understanding.

[Farmer Joe in B...]

Watched the documentary, Money for Nothing, this weekend.

Excellent recap of the history of the fed and its boom/bust cycles...!!  People need to watch this.  Please share.  More Americans need to be aware of what the fed is and what it is doing (has done) to our country. 

[yogibear]

Moar and moar stock buy-backs with cheap Federal Reserve dollars. 

This should end well.

[Surveyor4Pres]

Who would've thought that in a "free market" and capitalist society,

that the markets would be controlled by an unknown consortium of banks?

So, one word determines the fate of our Wall Street existence?

Truly, we have entered the World of the Sublime. /sarc

[dizzyfingers]

"Yellen will announce the end of the Fed's "Patience" with an economy in which resurgent waiters and bartenders continue to skew the job market even if it means consistently declining wages for 80% of the US labor force."

Someone doesn't understand that it's the American people who've lost patience with their rulers who have breached faith with them. And this, folks, is a very dangerous situation. Life will go on for both sides, but wait 'til after the elections when hopes that were high are dashed... Of course ZHers know voting doesn't solve problems, right?