Those Fed minutes top the list of economic reports in the coming week. There is also housing starts data Tuesday, and the National Association of Home Builders survey, released Monday. The Philadelphia Fed survey is Thursday, as are leading indicators. Weekly jobless claims are also reported Thursday.
"I think you're going to see the Fed sound more optimistic. The Fed is going to follow the equity market like everybody else. It will be less doom and gloom than it was in March," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank.
In terms of data this week, "the only thing we're looking for is a bounce in housing starts because they are extremely depressed, and then I would say just watch for the jobless claims numbers which are going to be around 640,000." he said.
LaVorgna said the main focus for the Treasury market will be the stock market. "The equity market is pretty much driving everything. It's driving all of the sentiment indexes...It's helping keep spreads in as they've rallied a lot. Everything has been an equity trade," he said.
"There's a little bit of circularity here. The longer the equity market stays up 35 percent from its low, the more likely the economy does better, and it's more likely the equity market doesn't go back down," he said. The risk to the stock market is that the recovery will not be as robust as investors think it will be.
"Do you get a sharp cyclical type of recovery? Our view is that's not the case, but that's what the market is trying to figure out," he said.
The Risk Trade
In the past week, the dollar gained a percent against the euro but it lost 3.4 percent against the yen .
"The price action suggests the risk rally has ended, and we're likely to see further weakness in the risky assets, basically stocks and yen crosses. You could throw commodities in there too," said Brian Dolan, chief strategist at Forex.com.
Dolan expects the dollar to gain some traction in the week ahead but at the same time, other assets will move lower or sideways. "It's pretty quiet out there on the data front, and unfortunately basically the momentum has fallen out and there's not going to be a lot of new juice coming in," he said.
Dolan said there are a few pieces of foreign data worth watching. A major German sentiment survey is released Tuesday, and Eurozone purchasing managers data is released Thursday.
Earnings Central
There are just a few companies reporting in the week ahead, as the earnings season winds down. A group of retailers report, starting with Lowe's Monday, then Home Depot , TJX and Saks Tuesday. Target , B.J.'s Wholesale, PetSmart, Limited Brands and Ann Taylor are out Wednesday. Ross Stores, Gap, Gamestop and Aeropostale report Thursday. (Get more earnings updates below the quotes box.)
