Agenda
| Time | Indicator/Event | Comment |
| 00:00 | Monster employment index | Seasonal decline |
| 08:30 | Employment cost index | Likely to remain well-behaved |
| 08:30 | GDP | Annual revisions create uncertainty |
| 08:30 | Jobless claims | Technical upward bias again this week |
| 08:30 | Continuing claims | Highly uncertain |
| 09:45 | Chicago PMI | Around breakeven again in July |
| 10:00 | Milwaukee PMI | Moderate rebound from weak June |
| 11:00 | 3- and 6-month bill announcement | A small increase possible |
| 11:00 | Kansas City Fed index | Moderate rebound from weak June |
| 14:00 | TSLF auction | $50 billion of Schedule 2 collateral |
Intraday Updates
The composition of Q2 GDP growth differed from expectations, but the surprises don't alter our expectation that growth will drop back below 1% in the third quarter. The level of initial jobless claims was inflated by changes in the unemployment insurance program, but the technical problems probably don't explain all of this morning's increase. The ECI was well-behaved, as expected.
The regional purchasing managers surveys don't alter our expectation that the national ISM index will remain range-bound tomorrow. more »
Economic Indicators
The focus swings back to the economic data today. The GDP report is likely to include a solid Q2 growth rate of 2% or so, but we’ll also be watching the annual revisions for any changes in the broader economic context. The employment cost index is likely to be well-behaved again in today’s Q2 report. Initial jobless claims seem likely to send a weaker signal than the market expects again this week. Later in the morning, we expect to see more mixed results from the last major round of regional factory surveys, which would be consistent with our forecast of a reading just under 50 in tomorrow’s ISM index. more »
Federal Reserve Operations & the Overnight Market
Fed Open Market Operations We expect the Desk to arrange a 3-part RP package consisting of a $5 billion 14-day RP, a large 7-day RP, and a minimal overnight RP.
Also, as part of yesterday’s package of enhancements to its liquidity facilities, the Fed quietly changed the collateralization rules for TAF bidding. We don’t think the amendments to the collateral rules will have much practical effect, but they were the subject of enough customer questions yesterday to be wortha more detailed review. more »
Fed Funds Monitor We expect month-end effects to result in pronounced tightness for most of the session, with a late-day dip bringing today's effective rate to about 10 basis points above target. more »
Treasury Finance
We think the Treasury may start to increase the size of the 3- and 6-month bills again this week. more »
The Money Market Observer
Monday, Jul 28 The newswires will be full of forbidding fiscal headlines on Monday. OMB will release its Mid-Session Review of the budget, which is almost certain to predict record deficits for this year and next. The Treasury will publish its projections quarterly borrowing needs in the afternoon, which are likely to be roughly twice as large as the average of recent years. As discussed last week, we think the deteriorating fiscal outlook is likely to prompt the Treasury to expand its issuance in the 10-year sector in the coming months. more »
Daily Press Summary (pdf)
ICAP's i-Recap Report for Thursday, Jul 31 The i-Recap report provides relevant market news from Dow Jones Newswires and data from ICAP and Wrightson ICAP in a take-home, easy-to-read format highlighting key developments which could impact the capital markets the ensuing trading day. Download a PDF file of the most recent report now. go »
i-Recap Report Archive go »
