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Trading Radar: Lighter Post-Jobs Calendar Ahead

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

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In the week past we saw an event for the history books: ECB President Mario Draghi said "never again" to deflation, which changes the way investors will look at assets in Europe  forevermore. European sovereign bonds fared the best, with the Italian 5-year yield declining by 32.5bps in the week. It now trades below US Treasuries of a similar duration. The yield has fallen by 137bps this year and has halved the spread it trades at relative to German Bunds.

Typically after a jobs report, the economic calendar is light in the following week and that is no different for next week. The two domestic events of note are May advance retail sales and producer prices.

Retail sales, reported next Thursday, are expected to climb by 0.6% month-on-month after rising 0.1% in April. Gasoline prices were very stable during the month, but same-store sales accelerated by 1%, a sign that consumer spending is picking up in the US. Consumer confidence indices from the University of Michigan and Conference Board showed a drop and small increase for May, respectively, which supports the argument that expectations for retail sales might be optimistic.

Producer prices are expected to rise by 0.1% month-on-month in May, and 2.4% from a year ago, thanks to a very large jump in food and feed prices last month. Distributive services prices continue to be the main driver behind those price increases.

There are only two FOMC members scheduled to speak next week, James Bullard and Eric Rosengren, before they go into their customary quiet period running up to the meeting. The FOMC's next scheduled meeting is on June 18. Nearly every market participant expects the Fed to continue tapering its monthly asset purchases by another $10 billion. The wildcard is what changes the Fed might make to its economic projections.

The rest of the world is almost void of catalysts next week. On Friday, China will release industrial production and retail sales data from May. Recent manufacturing and services surveys have shown a small acceleration in growth from China, and investors will be looking for hard data to corroborate that acceleration. The New Zealand Reserve Bank will make its rate decision on Wednesday evening. At its last meeting, the RBNZ hiked rates, but its currency continues to weaken as recent inflation reports show continued acceleration.

There are only four earnings reports of note next week. These come from Radioshack (NYSE:RSH), Ulta Salon (NASDAQ:ULTA), H&R Block (NYSE:HRB), and Finisar (NASDAQ:FNSR).

Monday, June 9

US Economics (Time Zone: EST)
 
No major reports scheduled
11:00 Fed to purchase $850m-$1.1b bonds in 22-30 year range
11:30 Treasury to sell $25b 3-month bills and $23b 6-month bills
 
Fedspeak
 
09:10 Bullard to speak in Florida
13:30 Rosengren to speak in Guatemala
 
Global Economics (Time Zone: GMT)

JPY Trade Balance - BOP Basis (APR)
JPY GDP (1Q F)
 
Earnings
 
No major reports

Tuesday, June 10

US Economics (Time Zone: EST)
 
10:00 Wholesale Inventories, Apr., exp. 0.6%, prior 1.1%
11:00 Fed to purchase $2.5-$3.25b notes in 5- to 6-year range
13:00 Treasury to sell $28b 3-year notes

Global Economics (Time Zone: GMT)

NZD Manufacturing Activity (1Q)
01:30 AUD NAB Business Confidence (MAY)
01:30 AUD Home Loans (APR)
08:30 GBP Industrial Production (APR)
02:30 GBP Manufacturing Production (APR)
09:00 EUR Italy GDP (1Q F)
13:00 GBP NIESR GDP Estimate (MAY)

Earnings

Before:
Radioshack (RSH)
 
After:
Ulta Salon (ULTA)

Wednesday, June 11

US Economics (Time Zone: EST)

11:00 Fed to purchase $850-$1.1b bonds in 22- to 30-year range
13:00 Treasury to sell $21b 10-year notes in reopening
14:00 Monthly Budget Statement, May, exp. -$142.5b, prior -$138.7b

Global Economics (Time Zone: GMT)
 
08:30 GBP Jobless Claims Change (MAY)
08:30 GBP ILO Unemployment Rate (APR)

Earnings

Before:
H&R Block (HRB)
 
After:
Restoration Hardware (RH)

Thursday, June 12

US Economics (Time Zone: EST)

08:30 Retail Sales, May, exp. 0.5%, prior 0.1%
08:30 Import Price Index, May, exp. 0.2%, prior -0.4%
08:30 Initial Jobless Claims, June 7, exp. 305k, prior 312k
10:00 Business Inventories, Apr., exp. 0.4%, prior 0.4%
11:00 Fed to purchase $550m-$800m TIPS in 4 to 30 year range
13:00 Treasury to sell $13b 30-year bonds in reopening
 
Global Economics (Time Zone: GMT)

NZD Reserve Bank of New Zealand Rate Decision
01:30 AUD Unemployment Rate (MAY)
06:45 EUR France CPI
09:00 EUR Euro-Zone Industrial Production (APR)
12:30 CAD New Housing Price Index (APR)

Earnings

After:
Finisar (FNSR)

Friday, June 13

US Economics (Time Zone: EST)

08:30 PPI Final Demand, May, exp., 0.1%, prior 0.6%
09:55 University of Michigan Confidence, June, exp. 83, prior 81.9

Global Economics (Time Zone: GMT)

05:30 CNY Retail Sales (MAY)
05:30 CNY Industrial Production (MAY)
06:00 EUR Germany CPI (MAY F)
08:00 EUR Italy CPI (MAY F)
09:00 EUR Euro-Zone Trade Balances (APR)
09:00 EUR Euro-Zone Employment (1Q)

Earnings

No major reports

Twitter: @MichaelSedacca

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