|07:30||NFIB index||Still falling|
|08:30||Productivity||No growth in Q2|
|11:30||4-week bill auction||$12 billion increase to $35 billion|
|13:00||3-yr note auction||Unchanged at $32 billion|
|14:15||FOMC meeting announcement||Watchful, but no major policy initiatives|
|Weekly chain store surveys||Sales hurt by bad weather and worse headlines|
[7:30 Data] The 0.9-point decline in the NFIB small business optimism index was in line with expectations.
[8:30 Data] As expected, the slowdown in GDP led to lower estimates of productivity growth in the first half of 2011.
[FOMC Announcement] The FOMC adopted the first item on Chairman Bernanke's list of policy options this afternoon, and left the door open to doing more at future meetings. A key question in the weeks ahead will be whether the Fed views its forecast of a near-zero funds rate through the middle of 2013 as more of a conditional forecast or a quasi-commitment. more »
There is not much on the economic calendar this morning. NFIB small business optimism index at 7:30 is the only real-time economic indicator on this morning’s schedule. The Labor Department will also release the preliminary Q2 productivity report, which will include extensive (downward) revisions. more »
The FOMC is likely to adjust the language of its statement this afternoon to affirm willingness to provide support for the economy, but is unlikely to unveil any substantive policy initiatives. more »
Federal Reserve Operations & the Overnight Market
Fed Open Market Operations Excess reserve forecast table more »
Fed Funds Monitor Fed funds data tables more »
The Treasury has two auctions on tap today: a $35 billion 4-week bill at 11:30 and a $32 billion 3-year note at 1:00. Participation levels will be watched closely in both sales. more »
The Money Market Observer
Monday, Aug 8 Given that S&P obviously intended to downgrade the U.S. from the outset, it is probably best to have gotten the announcement out of the way quickly. Having the threat of that hanging over the market in the weeks and months ahead might have led to repeated bouts of volatility like that seen on Friday.
We don’t expect the Fed to make any major policy moves at this week’s FOMC meeting, but it will assuredly review its options for further easing. Only one of the three tools cited by Chairman Bernanke in his semi-annual testimony offers much hope of helping the economy. Strengthened rate guidance would not accomplish much at this juncture, and a reduction in the interest rate on reserves might actually be counter-productive. That leaves adjustments to the size or average maturity of the Fed’s portfolio as the only viable option among Bernanke's three choices. more »
Daily Press Summary (pdf)
ICAP's Inside Debt Report for Tuesday, Aug 9 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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