Markets will be focused on inflation data this week

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Published Date 6/24/2024

Last week there was little to trade on, this week the calendar is full, and Treasury will auction $183B of 2s, 5s and 7 year notes on Tuesday, Wednesday, and Thursday. How strong of demand will be key, recent treasury auctions over the last month have met with strong demand, partly because of unsettled issues in Europe over the French election next Sunday and UK elections on the 4th of July. Inflation at the end of the week, the forecast looks promising with inflation edging lower. There is the usual compliment of Fed officials sprinkled through the week although with PCE on Friday their comments won’t elicit much reaction.

With no data today and a heavy calendar through the week today is likely to be quiet with little change.

The forecast for May PCE that will print on Friday is encouraging, estimates for overall and core inflation compared to April are for a decline that if the estimates are in fact actual will push markets to expect the Fed will lower rates sooner than what is presently anticipated. Fed officials continue to waffle but all saying the same thing, that the Bank is looking for a that trend inflation is slowing. The last two month’s data has shown inflation isn’t increasing but still not enough to open the door for cuts. By the end of the day Friday a clearer picture should emerge, in the meantime Fed officials speaking this week will echo what has been said over the last month.

At 9:30 am the DJIA opened +87, NASDAQ -41, S&P unchanged. The 10 year note at 9:30 am unchanged at 4.26%. FNMA 6.0 30 year coupon at 9:30 am -4 bps from Friday's close and -3 bps from 9:30 am Friday; the 6.5 coupon unchanged at 9:30 am and -1 bp from 9:30 am Friday.

This Week’s Economic Calendar:

Tuesday,

9 am April Case/Shiller home price index (year/year +7.0% 20 city)

10 am June consumer confidence index (100.00 from 102.0 in May)

1 PM $69B 2 year note auction

Wednesday,

7 am weekly MBA mortgage applications

10 am May new home sales (650K from 634K)

1 am $70B 5 year note auction

Thursday,

8:30 am weekly jobless claims (236K from 238K the prior week)

May durable goods orders (0.0%, ex transportation +0.1%, core capital goods +0.1%)

Final Q1 GDP (+1.4% from +1.3%; annual personal consumption spending +2.0% unch)

May advance US trade deficit (-$95.6B from -$98B in April)

10 am May pending home sales (+1.9% from -7.7% in April)

1 pm $44B 7 year note auction

Friday,

8:30 am May PCE inflation (month/month +0.1% from +0.3%, year/year +2.6% from +2.7%; core PCE month/month +0.1% from +0.25, year/year +2.6% from +2.8%)

May personal income (month/month +0.4% from +0.3%, personal spending month/month +0.3% from +0.2%)

9:45 am June Chicago purchasing managers index (40.0 from 35.5)

10 am final June consumer sentiment index from University of Michigan/Wells Fargo (65.7 from 65.6 mid-month)

Source: TBWS

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