The week's economic calendar is on the light side with data from the inflation reading Consumer and Producer Price Index along with Retail Sales and Consumer Sentiment. Earnings season will continue and could impact the markets as future guidance has been put on hold due to the pandemic. Stocks are lower after Germany and South Korea reported a pick-up in new virus cases after lifting some restrictions. Fed Chair Jerome Powell will be speaking via webcast hosted by the Peterson Institute for International Economics at 9 a.m. ET on Wednesday.
The U.S. bond markets will be under pressure this week as a massive amount of new supply will be hitting the markets. This week, $96B in supply will be offered this week starting with today's $42B 3-year Note auction. The backup in yields last week is directly attributed to the Treasury recently announcing they will need to borrow $3 trillion though the 3rd Quarter. In addition, the Treasury will need to borrow more, possibly much more, before this is over to fund the stimulus programs enacted by Congress. Come May 20th the Treasury will start selling a new 20-year Treasury bond,$20B worth, to start paying for the enormous stimulus package.
Economic data light this week. Fed Chair Powell speaking. Big bond supply coming to market.
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