The Week Ahead: Central bankers, prices, retail, industry

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The Federal Open Market Committee begins a two-day meeting on Tuesday, which culminates on Wednesday at 2 p.m. New York time with the announcement on interest-rate targets and the release of in-house economic forecasts, and then with a news conference with Fed Chairman Jerome Powell at 2:30 p.m.

The FOMC in March raised its target Fed Funds Rate by 25 basis points to a 1.5%-1.75% range, having raised rates by the same increment three times in 2017, once in 2016 and one in 2015. Before that was the six-year Great Recession hiatus on target changes. The market yield on 10-year Treasury notes compared with 10-year inflated-protected Treasuries implies inflation of 2.13%.

Major economic reports out during the week:,The consumer prices on Tuesday and producer prices (final demand) on Wednesday and retail sales on Thursday, each at 8:30 a.m., and industrial production on Friday at 9:15 a.m.

Leading indicators (in descending order of importance):

The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.

The M2 money supply, at 4:30 p.m. Thursday.

The S&P 500 index, reported continually during market hours.

Average weekly initial claims for unemployment from the jobless claims report at 8:30 a.m. Thursday.

Index of consumer expectations from the University of Michigan consumer sentiment survey, at 10 a.m. Friday.

Events arranged by day:

Tuesday: Consumer prices at 8:30 a.m. and the Treasury Budget at 2 p.m.

Wednesday: Producer prices (final demand) at 8:30 a.m., petroleum inventories at 10:30 a.m., the FOMC announcement and forecasts at 2 p.m. and Fed Chair Powell’s news conference at 2:30 p.m.

Thursday: Jobless claims, retail sales and import and export prices, each at 8:30 a.m., business inventories at 10 a.m. and the M2 money supply at 4:30 p.m.

Friday: The Empire State manufacturing survey of conditions in New York at 8:30 a.m., industrial production at 9:15 a.m., the University of Michigan consumer sentiment survey at 10 a.m. and the Treasury Department international capital report at 4 p.m.

I also keep an eye on the Baltic Dry Index, updated daily, and the 10-year implied inflation rate based on U.S. Treasury yields.

By Tim Bovee, Portland, Oregon, June 9, 2018

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License
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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

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