Tomorrow, Tuesday (and Wednesday as well), the Federal Open Market Committee meets. There is 0 chance that it will move short term interest rates from their current position, which is a managed float somewhere between 0% and .25%. But all eyes will be on whether or not the Fed chooses to keep buying Treasury securities in its attempt to keep longer-term rates (and the mortgages tied to them) down. The Fed is scheduled to cease its program of purchases ($300 billion worth) in September.
Meanwhile, the Treasury will dump a record $75 billion in bonds on the markets this week.
Most of the important data mid-week will come from abroad. Particularly important will second-quarter GDP from Germany, France and the Eurozone. Some commentators are expecting Germany, which has been showing pronounced strength in exports and industrial production recently, to actually register positive growth. This would no doubt make for a a big, big psychological boost worldwide, but even if growth is positive, big troubles still loom in Germany, and the threat of a double-dip can't be wished away (they haven't taken toxic loans off their banks' books yet, and their job-saving schemes, in which workers are paid, and their positions maintained during periods of inactivity, are set to wear down soon, for starters). The US reports on its July Trade balance Wednesday: the expected figure is in the mid-twenty billions,around where it's been for the last few months.
At the end of the week, US industrial production and capacity utilization reading will shed more light on how robust any dawning recovery is, especially in manufacturing. Retail sales come in on Thursday, and on Friday the University of Michigan survey will report on the state of the consumer. Observers hope the latter can begin catching up with the formers' expected upward trend. At the end of the day, its the consumer that remains the big question mark. Eurozone inflation figures also come in on Friday.
