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US Economic Chartbooks
Please see our Economic Week Ahead Chartbook for a discussion of this week's economic releases provided in a visually friendly format that includes graphs, brief descriptions of SMR's forecasts, and links to detailed data previews. If you missed anything from last week, see our Economic Week in Review Chartbook for a look back at the releases with links to full analyses.
Jun  26  

Fixed Income Focus: Curve Flattening Dominates...2Yr Auction Preview
Treasury yields were mixed this past week as the curve continued to flatten, partially in response to tumbling oil prices.

Treasury will hold a $26.0 billion 2-year note auction on Monday afternoon. If the auction were to stop in line with the current WI bid it would be the highest stopout rate for a 2-year auction since October 2008. The 2-year note has also been trading especially tight in repo, and the exceptional front-end foreign demand for the 3-year during the mid-month coupon auction cycle, raises the possibility of demand for the 2-year as well.
Jun  25  
Trading Today

Research Briefing - Inflation - the core reasons for the slowdown
The pace of inflation has decelerated markedly this year, as the annual advance in the consumer price index (CPI) has slowed to 1.9% in May from 2.7% in February and the core CPI (ex food and energy) has slipped to 1.7% in May from 2.3% in January. Similarly, the Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index on an annual basis, has moderated to 1.7% in April from 2.2% in February and the core PCE price index (excluding food and energy) fell to 1.5% from 1.8% over the same time period. This slowdown represents a bit of a puzzle given that many top-down economic indicators suggest that inflation should be accelerating at this point in the business cycle or, at a minimum, stabilizes around the Fed's 2% inflation target. The top-down measures include a narrowing GDP output gap and a labor market near or at full employment. As resource slack in the economy diminishes, upward inflation pressures typically build. However, there are a number of structural changes in the economy that alter the historical relationship between labor slack, wages, and inflation.
Jun  16  
Economic Research

Viewpoint - FOMC: Normalization planned, but inflation key
As fully anticipated, the FOMC raised the fed funds target range by 25 basis points to 1% - 1.25%. Additionally, in line with our expectations, the FOMC announced its plan for balance sheet reduction, with the paring of debt reinvestments intended to begin this year. The FOMC signaled it intends to continue normalizing interest rates and the balance sheet in the near-term. This is predicated on their unchanged view that inflation next year will reach the 2% target rate, despite the recent deceleration in inflation. We continue to expect the FOMC to impose one more rate hike in 2017, but downside risk to the inflation outlook means a greater possibility of a pause in rate hikes this year. To view the PDF, click here.
Jun  14  
Federal Reserve

Implications of the Fed's Redemption Caps for Treasury Borrowing
Key Takeaways:
--The Fed will reduce its balance sheet a bit more gradually than we had assumed.
--In this comment, we estimate the impact of the Fed's plan on Treasury borrowing for fiscal 2018. We think the market can adjust to the required increase in supply without a significant impact on interest rates.
Jun  14  
Treasury Market

Latest Research HERE for Research Window
16:17Treasury Market Summary for Monday, June 26
16:09Treasury Technicals: Bears Lose Short-Term Footing
15:52Trading Tomorrow: S&P/CS HPI, Confidence, Richmond, Yellen, 5Y Auction
13:182-Year Bidding Details ... Second Large Buyside Takedown
13:042-Year Note Auction Results ... Strong
11:563 & 6-Month Bidding Details: Improved from Last Week but Below Average
11:343 & 6-Month Bill Auction Results... Okay
11:03Treasury Announces $40.0 billion 4-Week Bill Auction Details
09:573 & 6 Month Bills Preview Auction Talk, History and Bidding Pools

Chart of the Day
How the Fed's Treasury Holdings Will Evolve
How the Fed's Treasury Holdings Will Evolve

Monday, 26 Jun
Fed's Williams speaks in Sydney
  Durable Goods Orders  May  -1.1% Vs Prev's -0.9%r
  Durables Ex Transportation  May  +0.1% Vs Prev's -0.5%
  Chicago Fed Nat Activity Index  May  -0.26 Vs Prev's 0.57r
  Dallas Fed Manufacturing Activity Index  Jun  15.0 Vs Prev's 17.2
  Treasury will announce a 4-week bill auction
  Treasury will hold 3-month and 6-month bill auctions
  Treasury will hold a 2-year note auction
  FreddieMac will announce reference bills
  Freddie Mac may announce reference notes