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The Day Ahead

Good morning, its Tuesday April 12th, the 102nd day of 2005.

This morning’s installment of The Day Ahead is a little late as I am recuperating from oral surgery. Lets catch up quickly here.

As pretty much everyone expected, the US Trade Deficit was large, perhaps a little larger than some expected as it hit yet another record at $61 billion dollars with a 4.3 percent rise in the gap following directly on the heels of a 5% rise in January.

``While we imported the necessities, we didn’t sell a lot to the rest of the world,’’ said Joel Naroff, president of Naroff Economic Advisers in Holland, Pennsylvania. ``As for the Fed, this report would likely mean more measured rate hikes.’’1

The US Dollar, once weakened by such news, moved up as this environment suggests the Fed may remain on its interest rate increase path. Currently the US Dollar Index is up 0.76%.

Also this morning, Canada’s equivalent to the FOMC, the Bank of Canada, held interest rates again2.

Of particular interest to interest rate watchers this afternoon, the FOMC meeting minutes from the March meeting will be released. You’ll recall this meeting is where the tone shifted towards more concern over inflation – now we’ll find out just how widespread the concern was. Bond and equity markets are certain to react to the revelation (or lack thereof). Stay tuned…

US Market Calendar

  • 8:30 am: Goods & Services Trade Balance – Feb.1
  • 8:55 am: Redbook – Apr. 9th week
  • 2:00 pm: Treasury Budget – Mar.
  • 2:00 pm: FOMC minutes from March meeting

Canadian Market Calendar

  • 8:30 am: Merchandise Trade Balance – Feb.
  • 8:30 am: New Housing Price Index – Feb.
  • 9:00 am: Bank of Canada Interest Rate Policy Announcement2

Earnings and the Federal Reserve

For earnings highlights, please see today's WSJ Earnings Calendar.

For a list of upcoming speeches, congressional testimony, Federal Open Market Committee material, and statistical releases, please visit the What's Next page of The Federal Reserve Board website. Recently released Federal Reserve Board material, including market moving FOMC decisions and speeches by members, will be found on their What's New page.

1 U.S. Trade Deficit Widened to Record $61 Bln in Feb.

2 Canada’s Dollar Falls as Bank of Canada Leaves Rate Unchanged

05.04.12 11:59 #