This Week's Commitment Of Traders - Futures, Hedge Fund Buying

Following futures positions of non-commercials are as of April 20, 2021.

10-year note: Currently net long 15.6k, up 18.3k.

The FOMC meets next week. It is the year’s third meeting; five more remain – the scheduled ones, that is. Not a whole lot is expected to come out of this meeting.

In the March meeting, members already updated their economic projections. This year’s real GDP growth forecast was raised to 6.5 percent from 4.2 percent last December; core PCE inflation forecast went from 1.8 percent to 2.2 percent. The Fed continues to believe the pickup in inflation is transitory; it is expected to moderate next year.

Markets more or less agree. The University of Michigan’s survey respondents expect next year’s inflation at 3.7 percent but only 2.7 percent in the next five years.

Amidst this have come commentaries on rising cost pressures from several companies including Coca-Cola (KO), Procter & Gamble (PG), Kimberley Clark (KMB), Owens Corning (OC), Waste Management (WM), and DR Horton (DHI). In March, US existing home prices were up 17.2 percent year-over-year to $329,100 – a record.

Markets would want to hear Chair Powell’s take on this.

30-year bond: Currently net short 107.6k, down 10.4k.

Major economic releases for next week are as follows.

Durable goods orders (March) will be published on Monday. In the 12 months to February, orders for non-defense capital goods ex-aircraft – proxy for business capex plans – jumped 9.1 percent to a seasonally adjusted annual rate of $72.5 billion. January’s $73.1 billion was a new record.

The S&P Case-Shiller Home Price Index (February) is due out on Tuesday. Nationally, US home prices in January surged 11.2 percent y/y – a 15-year high.

GDP (1Q21, first estimate) is scheduled for Thursday. Real GDP grew 4.3 percent in 4Q20 and 33.4 percent in the quarter before that. This was preceded by contractions of five percent in 1Q and 31.4 percent in 2Q.

Friday brings the employment cost index (1Q21), personal income/spending (March) and the University of Michigan’s consumer sentiment index (April, final).

In 4Q20, private-industry compensation grew 2.6 percent y/y, with wages & salaries rising 2.8 percent and benefits 2.1 percent.

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