Brendan Arthur Ring at www.flickr.comThere is a ton of economic data coming out next week and people are going to be laser-focused on it in a way that they haven't been in a long time.
First we'll give you an overview of the data that's coming out. Then we'll discuss why people will be watching it so closely.
Monday is Global PMI day. Starting Sunday night (Eastern Time), we'll get a slew of regional manufacturing reports, starting in Asia, then moving to Europe, and then ultimately to the US and Brazil. In about 12 hours, we'll get a huge sweep of the state of the global manufacturing sector through this series of regional surveys. The Asian numbers will help confirm if the slowdown is real. The European numbers will tell us if, perhaps, green shoots are coming, and of course the US data will indicate how well we're hanging on.
Also on Monday we get Construction Spending and Auto and Truck Sales. Auto and Truck sales tend to be a good indicator of the state of the jobs market.
Tuesday is quiet, but then on Wednesday we get labor costs (a measure of inflation), factory orders, and then PMI services, which is basically a repeat of Monday's big PMI day, except focused on the services sector. Also on Wednesday there's the ADP jobs report, which attempts to anticipate the official job report's measure of private sector job creation.
On Thursday, Initial Jobless Claims get reported (a great high-frequency measure of the labor market), as well as the latest layoffs report from Challenger.
And then of course Friday will be gigantic, with the Jobs Report in the morning, and then Consumer Credit in the afternoon. Last month's jobs report was solid (with good upward revisions to previous months) and expectations are for another good month.
So the volume of data will be huge. But why will everyone care?
Because this might not be a test.
For the first time since the crisis, there's serious talk of the Fed beginning to pull back the extraordinary monetary measures it's employed to fight a weak economy. People are really talking about "The Taper", the process of reducing how much the Fed spends each month on quantitative easing.
Along with this talk of The Taper, there's a sense in the markets of a major shift in interest rates.
US Treasury yields have been shooting up lately, as you can see in this chart.
Not only are people selling Treasuries, the selling volumes are enormous.
Outside of the Treasury market, we had the big 208-point down day yesterday. There's also the trouble in Japan, and the collapse of emerging market currencies, which became a story that got on everyone's radar in the last week.
So in both the markets and the economy and the Fed talk, suddenly the wind is picking up. Next week's data will be huge.
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