|08:30||Housing starts||Small increase, concentrated in single-family sector|
|09:00||Harker (FOMC voter)||On the economic outlook|
|09:15||Industrial production||Slight decline overall despite jump in auto production|
|10:00||JOLTS openings||Close to recent average in November|
|10:00||U. Michigan cons. sent., early||Flat or slightly higher in early January|
|11:00||Fed outright Treasury bill purchase||$7.5 billion purchase of Treasury bills|
|12:00||Tsy dealer meeting agenda||Focus on the Treasury's 20-year bond plans|
We expect this morning’s residential construction report to show housing starts up slightly and permits roughly flat in December. Most of the components of the industrial production index should be quite soft in December, with the major exception being motor vehicle and parts. Our guess is that the overall index will be slightly negative. We think the main aggregates in the JOLTS report will move sideways over the near term, and our forecasts for both job openings and quits are close to the averages for the past three months. Early indications are that household sentiment measures (including the University of Michigan consumer sentiment index) will remain buoyant in January.
Today’s Fed purchase: $7.5 billion in bills
We expect no major surprises in the Fed’s monthly open market operations announcement on Tuesday afternoon. The Desk may make token reductions in the maximum offering sizes of its repo operations, but these are unlikely to be a significant constraint on dealer borrowing from the Fed over the coming monthly cycle.