The Day Ahead: US PPI; Bernanke, Bair & Paulson to Testify on TARP

By: •

On Tuesday, the producer price index for October and the National Association of Home Builders' (NAHB) Housing Market Index for November will be released in the U.S. Market participants will also be interested in hearing testimony from Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson.

The U.S. producer price index for October is expected to decline 1.9% month-over-month following a 0.4% decline in September. Core PPI is expected to rise by 0.1% month-over-month, below the prior month's 0.4% increase. The annualized core PPI is expected to rise 4.0%, in line with the previous month's increase.

Economists from IHS Global Insight agree with the consensus estimate and expect the core producer price index to register a slight increase of 0.1%.

"Commodity prices are declining as global demand retrenches and the advanced economies of Europe and North America enter recession," they wrote. "The recent drop-off in manufacturing has also reduced demand for durable and capital equipment, easing price pressures throughout the production pipeline."

Also on Tuesday, Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and FDIC Head Sheila Bair will testify before the House Financial Services Committee on the implementation of the Emergency Economic Stabilization Act of 2008.

The National Association of Home Builders will release its housing market index for the month of November. Economists are expecting the index to come in at 14, unchanged from the previous month's result.

The U.S. Treasury will release net long-term TIC flows data for the month of September. In the prior month, net long-term TIC flows came in below the consensus forecast, totalling $14 billion in August, while total TIC flows for the month fell to $0.4 billion.

U.S. consumer confidence has been in the doldrums for the past year. ABC's consumer confidence report is expected to confirm that little has changed. In the prior week, the index came in at -49. This week the forecast is for a reading of -50.

Finally, the U.S. Treasury will sell $22 billion in 52-week bills and $32 billion in 4-week bills.

All Times in EST:

7:45 US ICSC Chain Store Sales

8:30 US Producer Price Index (M/M) October Exp: -1.9% Prior: -0.4%

8:30 US PPI Ex Food & Energy (M/M) October Exp: +0.1% Prior: +0.4%

8:30 US Producer Price Index (Y/Y) October Exp: +6.2% Prior: 8.7%

8:30 US PPI Ex Food & Energy (Y/Y) October Exp: +4.0% Prior: +4.0%

8:30 CA Stats Can Releases Research Paper on Provincial Purchasing Power

8:55 US Redbook Retail Sales

9:00 US Net Long-Term TIC Flows September Exp: $27.2B Prior: $14.0B

9:00 US Total Net TIC Flows September Prior: -$0.4B

9:30 US Fed Chairman Bernanke, Tsy's Paulson, FDIC's Bair will testify at U.S. House Financial Services Committee on TARP program

10:00 US NAR Metro Home Prices/State Resales Q3

11:00 US Passenger Airline Employment September

13:00 US NAHB Housing Market Index November Exp: 14 Prior: 14

13:00 US Treasury to Sell $22B 52-Week Bills

13:00 US Treasury to Sell $32B 4-Week Bills

17:00 US ABC Consumer Confidence W/E November 16 Exp: -49 Prior: -50

By Steve Stecyk and edited by Sarah Sussman
©CEP News Ltd. 2008