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Trading Radar: The Week of the Central Bank


Economics, earnings reports, and market events for the week ahead.

This past week was packed with volatility. Though the options volatility index did not reflect it, US equities had their most volatile week in the past year with hourly stochastics hitting the extreme boundaries more than a dozen times. Surprisingly, even though the SPX (INDEXSP:.INX) traded across a 41-point range, it only gained 0.03% for the week. On Friday, the sequester officially went into effect with no compromise reached between the political parties.

Next week will be equally as active since the economic calendar in the US will be very robust. On Tuesday, the ISM non-manufacturing composite index will be released, and Wednesday and Friday both bring jobs data. The ISM non-manufacturing composite is expected to show little change from January's report as increased taxes and lower wages work their way through the system. Additionally, the Friday jobs data will most likely see a similar outcome, with little change expected and nominal growth month-to-month. Wednesday's ADP reports continue to have more predictive power after the company changed its calculation rates to more accurately reflect the BLS data.

Globally it's the central banks' turn in the spotlight this week. In Asia, the Reserve Bank of Australia will make its monthly rate decision, with a more dovish outcome expected due to the minutes from February's meeting and recent comments from the deputy governor. However, nearly all economists are expecting no change in the central bank's benchmark interest rate at 3%. In Japan, the Bank of Japan will make its monthly decision, but because the governor position has not officially transferred power, it is unlikely anything groundbreaking comes out of the meeting. Next month, the central bank will need to begin taking action or the market will quickly begin turning the JPY against it.

In Europe, the Bank of England and European Central Bank will make their rate decisions on Thursday. While a rate cut is not widely expected from the ECB, more dovish commentary is expected given the market weakness lately and continued repayment of 3-year LTRO loans. No real change is expected out of the BoE as its committee still remains divided on additional policy easing.

Key earnings reports for the week include Pandora (NYSE:P), Smith & Wesson (NASDAQ:SWHC), VeriFone (NYSE:PAY), Workday (NYSE:WDAY), and Arena Pharmaceuticals (NASDAQ:ARNA).

Monday, March 4

US Economics (Time Zone: EDT)

09:45 ISM New York – prior 56.7
11:00 Fed buying $1.25b-$1.75b notes in 23 to 30-year range
11:30 Treasury selling $35b 3-month bills, $30b 6-month bills

08:00 Yellen speaking in Washington

Global Economics (Time Zone: GMT)

CNY Non-manufacturing PMI
09:30 EUR Eurozone Sentix Investor Confidence
10:00 EUR Eurozone PPI


Arena Pharmaceuticals (ARNA)
Boyd Gaming (BYD)
Ascena Retail Group (ASNA)

Tuesday, March 5
US Economics (Time Zone: EDT)

10:00 ISM Non-manufacturing composite – consensus 55.0, prior 55.2
10:00 IBD/TIPP Economic Optimism – consensus 48.1, prior 47.3
11:00 Fed to buy $2.75b-$3.5b notes in 7 to 10-year range
11:30 Treasury selling 4-week bills, $25b 52-week bills

2:00 Lacker speaking on monetary policy in Washington

Global Economics (Time Zone: GMT)

00:30 AUD Retail Sales
01:45 CNY HSBC Services PMI
03:30 AUD Reserve Bank of Australia Rate Decision
09:00 EUR Eurozone Services PMI (2nd estimate)
09:30 GBP Services PMI
10:00 EUR Eurozone Retail Sales
10:30 UK selling GBP4b in 5-year notes


Smith & Weston (SWHC)
VeriFone Systems (PAY)

Wednesday, March 6

US Economics (Time Zone: EDT)

07:00 MBA Mortgage Index
08:15 ADP Employment Change – consensus 170K, prior 192K
10:00 Factory Orders – consensus -2.2, prior 1.8%
2:00 Fed Beige Book
11:00 Fed buying $1.25b-$1.75b notes in 23 to 30-year range
08:15 Plosser speaking on the economy
8:30 Fisher speaking in Texas

Global Economics (Time Zone: GMT)

00:30 AUD GDP
10:00 EUR GDP (1st estimate)
15:00 CAD Bank of Canada Rate Decision
11:30 Germany selling EU4b 5-year notes


American Eagle Outfitters (AEO)
PetSmart (PETM)
Big Lots (BIG)
Staples (SPLS)

The Fresh Market (TFM)
Hovnanian Enterprises (HOV)

Thursday, March 7

US Economics (Time Zone: EDT)

08:30 Initial Claims – consensus 355K, prior 344K
08:30 Continuing Claims – consensus 3115K, prior 3074K
08:30 Trade Balance (Jan) – consensus -$43B, prior -$38.5B
08:30 Nonfarm Productivity – consensus -1.6%, prior -2.0%
2:00 Consumer Credit – consensus $14.5B, prior $14.59B
4:30 Fed releasing bank stress test results
11:00 Fed purchasing $3b-$3.75b notes in 5 to 7-year range

Global Economics (Time Zone: GMT)

JPY Bank of Japan Rate Decision
00:30 AUD Trade Balance
05:00 JPY Leading Index
06:30 EUR French ILO Unemployment Rate
06:45 CHF Unemployment Rate
11:00 German Factory Orders
12:00 GBP Bank of England Rate Decision
12:45 EUR ECB Rate Decision
21:45 NZD Manufacturing Activity
23:50 JPY GDP (final estimate)
9:30 Spain selling 2, 5, 10-year notes
9:50 France selling 5, 10, 15-year notes


Smithfield Foods (SFD)
Finisar (FNSR)
Quiksilver (ZQK)
H&R Block (HRB)
Skullcandy (SKUL)
Pandora (P)
Workday (WDAY)
Kroger (KR)
Nationstar Mortgage (NSM)

Friday, March 8

US Economics (Time Zone: EDT)

08:30 Nonfarm Payrolls – consensus 160K, prior 157K
08:30 Private Payrolls – consensus 167K, prior 166K
08:30 Manufacturing Payrolls – consensus 10K, prior 4K
08:30 Unemployment Rate – consensus 7.9%, prior 7.9%
08:30 Avg Weekly Hours – consensus 34.4, prior 34.4
10:00 Wholesale Inventories – consensus 0.3%, prior -0.1%

Global Economics (Time Zone: GMT)

CNY Trade Balance
08:15 CHF CPI
11:00 EUR German Industrial Production
13:15 CAD Housing Starts
13:30 CAD Unemployment Rate


Foot Locker (FL)

Twitter: @MichaelSedacca

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