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(CEP News) - The key event on Tuesday will be the release of Federal Reserve minutes from the March 17-18 meeting where the Fed surprised markets by announcing it would buy up to $300 billion in government bonds to support private credit markets.
The news came as a shock to many market participants who felt the move was not warranted given current economic conditions, especially given the near-unanimous decision at the January meeting to keep the option as ammunition. "The prospect for this radical policy shift to aggressive QE and modest monetization probably prompted fascinating debate among the FOMC members, making the Minutes a must read," said Michael Gregory, senior economist at BMO Capital Markets. However, economists from Handelsbanken Capital Markets said, "The decision was unanimous and we do not expect to find any new information in the minutes." Earlier in the morning, the Commerce Department will release wholesale inventories for February. Inventories are expected fall 0.7%, which would mar the sixth straight month of decline. The only scheduled speaker of the day will be Federal Reserve Bank of Dallas President Richard Fisher. Earlier this month, Fisher said the Fed was "ahead of the curve" in its decision to buy long-term Treasuries, and touted the positive reaction from markets upon the release. In Canada, housing starts for March will be released and are expected to continue their downward movement. All times in EDT: 7:00 US MBA Mortgage Applications W/E April 3 Prior: +3.0% 8:15 CA Housing Starts March Exp: +130.0K Prior: +134.6K Revised: +134.7K 10:00 US Wholesale Inventories February Exp: -0.7% Prior:-0.7% Revised:-0.9% 10:30 US DOE U.S. Crude Oil Inventories W/E April 3 Exp: 1250k Prior: +2844K 10:30 US DOE U.S. Gasoline Inventories W/E April 3 Exp: -1500 Prior: +2225K 10:30 US DOE U.S. Distillate Inventory W/E April 3 Exp: -350k Prior: +221K 10:30 US DOE U.S. Heat Oil Inventories W/E April 3 Prior: +298K 10:30 US DOE U.S. Refinery Utilization W/E April 3 Exp: 0.0% Prior:-0.28% 12:35 US Fed's Fisher Speaks in Japan on U.S. Economy 13:00 US Treasury to Sell 3-Year Notes 13:00 US Treasury to buy back Notes/Bonds 14:00 US Fed Releases Minutes from March 17-18 FOMC Meeting By Megan Ainscow,
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, edited by Stephen Huebl,
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