Dentalfloss
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Good Morning: The Long & the Short of it and The Bigger Picture - 6 February 2019 - ADM ISI
Inbox
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Ostwald, Marc
07:06 (52 minutes ago)
to Marc
- Very modest schedule of data to focus on another set of poor German Orders
and delayed US Trade; digesting RBA signal on rates; BoT, NBP and Brazil
BCB all seen holding rates; plenty more corporate earnings; US 10-yr sale
..........................................................................
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** EVENTS PREVIEW **
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Another day on which the data and events schedule will probably only have a limited impact on markets, with the Trump 'State of the Union' address (combative, uncrompromising, but with nothing new) and German Factory Orders (another big drop and sending a poor signal for Q1 GDP) to be digested ahead of the delayed US Trade Balance for November. There are central bank policy meetings in Thailnd, Poland and Brazil, and there is also some Fed speak (Quarles), while the US sells $19.0 bln of a new 10-yr T-Note.
Poland's NBP is again seen holding rates at their all-time low of 1.50%, and reiterating that rates will likely remain on hold for the whole of 2019, and arguing that the upward impact of utility price hikes will be transitory, above all given that core CPI at 0.8% y/y remains very subdued and well below its 2.5% target. The NBP MPC is however increasingly very divided on the outlook for rates, even if for the time being the majority on the MPC remains resolutely dovish.
Financial markets may be taking a very optimistic line on the outlook for the Brazilian economy due to the new Bolsonaro govt, but the central bank's COPOM policy committee is likely to be rather more cautious. It will above all be conscious that the wide budget deficit (2018 3.2% of GDP), high Unemployment and still sluggish growth (2018 GDP 1.8% vs. 2017 1.7%) present substantial hurdles for the new government to overcome, if it is to engineer a substantial fiscal stimulus.
Inbox
x
Ostwald, Marc
07:06 (52 minutes ago)
to Marc
- Very modest schedule of data to focus on another set of poor German Orders
and delayed US Trade; digesting RBA signal on rates; BoT, NBP and Brazil
BCB all seen holding rates; plenty more corporate earnings; US 10-yr sale
..........................................................................
********************
** EVENTS PREVIEW **
********************
Another day on which the data and events schedule will probably only have a limited impact on markets, with the Trump 'State of the Union' address (combative, uncrompromising, but with nothing new) and German Factory Orders (another big drop and sending a poor signal for Q1 GDP) to be digested ahead of the delayed US Trade Balance for November. There are central bank policy meetings in Thailnd, Poland and Brazil, and there is also some Fed speak (Quarles), while the US sells $19.0 bln of a new 10-yr T-Note.
Poland's NBP is again seen holding rates at their all-time low of 1.50%, and reiterating that rates will likely remain on hold for the whole of 2019, and arguing that the upward impact of utility price hikes will be transitory, above all given that core CPI at 0.8% y/y remains very subdued and well below its 2.5% target. The NBP MPC is however increasingly very divided on the outlook for rates, even if for the time being the majority on the MPC remains resolutely dovish.
Financial markets may be taking a very optimistic line on the outlook for the Brazilian economy due to the new Bolsonaro govt, but the central bank's COPOM policy committee is likely to be rather more cautious. It will above all be conscious that the wide budget deficit (2018 3.2% of GDP), high Unemployment and still sluggish growth (2018 GDP 1.8% vs. 2017 1.7%) present substantial hurdles for the new government to overcome, if it is to engineer a substantial fiscal stimulus.
