Daily Summary

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for Thursday, July 31, 2014


08:30Employment cost indexSlight pickup expected but still very soft
08:30Jobless claimsSubject to distortion but likely to rebound sharply after big drop last week
08:30Continuing claimsLittle change expected in latest week but 4-week average should drop again
09:00Milwaukee PMIDown a little from strong June reading
09:45Chicago PMIAlso down a little from strong June reading
10:15Fed Treasury coupon purchaseFebruary 2036 to May 2044 maturities
11:003- and 6-month bill announcementUnchanged at $51 billion
15:00Fed Treasury buyback schedule announcementLineup of outright operations for August

Intraday Updates

[8:30 Data]  The unexpected 0.7% increase in the ECI could play a major role in the Fed policy debate if confirmed by other wage data in the months ahead.  Initial jobless claims remained locked in a very low range in late July.

[Regional Factory Surveys]  The Chicago purchasing managers index dropped sharply in July, but the Milwaukee index remained strong.  As a group, the regional factory surveys still point to a small increase in the national ISM index tomorrow. more »

Economic Indicators

Today’s calendar consists of the employment cost index for Q2 and the usual weekly jobless report, both at 8:30, followed by the Milwaukee and Chicago PMIs for July, at 9:00 and 9:45 respectively. The ECI should pick up at least slightly from Q1’s unusually soft result. Initial claims remain subject to seasonal distortions, but seem likely to rebound from last week’s exceptionally low level. We see the PMIs softening a little from very strong June readings. more »

Federal Reserve Operations & the Overnight Market

Fed Open Market Operations The Fed will wrap up its July outright purchases in the morning with an operation covering long bonds and announce the next monthly Treasury buyback schedule this afternoon at 3:00. more »

Overnight Funding Monitor Daily GCF repo forecasts more »

Treasury Finance

The Treasury has a full calendar of refunding-related announcements next week, but only a very light auction calendar. We expect the 3- and 6-month bills to be unchanged at $27 billion and $24 billion respectively in this morning’s announcement. more »

The Money Market Observer

Monday, Jul 28 We don’t expect to learn much from this Wednesday’s FOMC announcement. The minutes of this meeting (due on August 20) may shed more light on the Fed’s thinking about its liftoff strategy for 2015, but we don’t expect the FOMC to commit itself to any decisions this week that would make their way into the policy statement. Separately, this week’s newsletter includes Part II of our preview of next week’s Treasury refunding announcement. The Treasury faces some unusual challenges over the next couple of years, as its gross borrowing needs will swing from moderate levels in 2015 to very high levels in 2016. The Treasury may want to smooth out its maturity profile by conducting buybacks of seasoned coupons next year. more »

Daily Press Summary (pdf)

ICAP's Inside Debt Report for Wednesday, Jul 30 ICAP's Inside Debt provides relevant end-of-day news summaries and market sector commentary from Reuters for the FOREX, Treasuries, Corporates and Equities markets, a 3 pm EST market snapshot pricing of all market sectors from ICAP and economic data from Wrightson ICAP in a take-home, easy-to-read format. Download a PDF file of the most recent report now. go »

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