The Week Ahead: March 18-24, 2013

March 18, 2013 01:26 AM
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via a special arrangement with Informa Economics, Inc.

Budget issues | Federal Reserve

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Budget matters continue to be the focus in Congress this week, with the economic calendar laced with several Federal Reserve events. After the close of business, Congress departs for the Easter recess, with the Senate returning April 8 and the House April 9.

The Senate considers the FY 2013 continuing resolution (HR 993) while the House and perhaps the Senate will consider their competing and considerably different FY 2014 budget resolutions.

Senators must first finish considering amendments to the continuing resolution (CR) that would fund the federal government before a current stopgap measure expires March 27. Work on the measure stalled last week in disagreements over amendments, causing leadership to defer a final vote on the bill until this week. As of March 14, the bill had 99 pending amendments, which leadership said would be reduced to a smaller list. Senate Majority Leader Harry Reid (D-Nev.) said passage is likely to occur only after senators are able to bring up their proposed changes to the spending bill, but added “one way or the other we're going to move forward with this on Monday.”

The Senate version of the bill extends the current stopgap funding measure for most federal programs but also is the vehicle for five of the 12 unfinished fiscal 2013 appropriations bills. In addition to two military program spending bills attached by the House, the Senate has added three covering domestic spending, including Agriculture. Both Reid and Senate Minority Leader Mitch McConnell (R-Ky.) said they supported that move and indicated the bill has the support of House Speaker John Boehner (R-Ohio).

House leadership announced March 15 its chamber could possibly consider a vote this week on the Senate amendment to the CR.

If senators are able to finish up work on the CR, the next legislative item is likely to be a Democratic budget resolution, which was voted out of the Senate Budget Committee by a vote of 12-10 late March 14. The resolution would be the first floor consideration of a Democratic fiscal plan in the Senate since 2009.

Most of the week's focus in the House will be on the FY 2014 budget resolution, which was voted out of the Budget Committee late on March 13. Budget Chairman Paul Ryan's (R-Wis.) budget calls for a small surplus of $7 billion in the final year of the budget window, in 2023. Deficit reductions would be attained through spending cuts, and the budget does not factor in any change to the Congressional Budget Office's estimate of incoming revenues. The proposal would also replace the sequester with lowered spending caps that would allow lawmakers to decide where to make cuts, but maintain the overall lower spending levels from fiscal 2014-2021. Sequester-level caps would end in 2021, but statutory spending caps would remain in place until 2023.

Regarding nominations, the Senate Banking, Housing, and Urban Affairs Committee on Tuesday will consider the nomination of Richard Cordray to be director of the Consumer Financial Protection Bureau, and that of Mary Jo White to be a member of the Securities and Exchange Commission.

The House Ag Committee on Wednesday will mark up several bills related to swaps regulation and the Commodity Futures Trading Commission (CFTC). Those include a bill (HR 1003) to improve consideration by the CFTC of the costs and benefits of its regulations and orders. Meanwhile, the CFTC's budget will be the focus of a House Appropriations panel hearing on March 20. The House Ag Appropriations Subcommittee will receive testimony from CFTC Chairman Gary Gensler.

Regarding energy, the The House Oversight and Government Reform Subcommittee on Energy Policy, Health Care, and Entitlements on Tuesday will hold a hearing on the Department of Energy's strategy for exporting liquified natural gas.

The cyber threats originating from China, Russia, and Iran are the focus of a Wednesday House Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies. The panel will examine protecting American critical infrastructure against such threats.

The 2013 trade agenda is the topic of a Tuesday Senate Finance Committee hearing. The full committee plans to examine the potential export opportunities for US businesses in the Trans-Pacific Partnership, a potential US-EU free trade agreement, and other upcoming trade negotiations.

Economic data releases focus on housing this week, with the Housing Market Index on Monday, Housing Starts on Tuesday an Existing Homes Sales on Thursday. Other pieces of economic data include the weekly jobless claims data and PMI Manufacturing Index on Thursday along with the Philadelphia Fed index. But the biggest focus of the week will be on the two-day Federal Open Market Committee and the accompanying updated economic forecasts and quarterly press conference by Fed Chairman Ben Bernanke. The key focus there will be on whether there are any indications on how soon the Fed may stop its stimulus efforts or scale them back. Beyond that, euro zone developments and any economic rumblings out of China are always potential sources of market moves. Plus, the Dow could return to its record-setting ways if the news and data next week back it up.

Key economic events and reports on tap this week include:

Monday, March 18
Europe: French President François Hollande meets with Germany's Chancellor Merkel.
EU agriculture: The European Union’s agriculture and fisheries council is among committees meeting in Brussels this week. It will try to agree a general approach on reform of the common agricultural policy (to March 19).
Iran nuclear talks resume: The group of nuclear negotiators – the five permanent members of the UN Security Council and Germany – resume talks in Istanbul over Iran’s nuclear program. Technical experts will meet in Turkey before talks return to Almaty in April to try to end the decade-old stand-off over Iran’s nuclear program.
Economic reports: Selected Interest Rates (Federal Reserve) | Housing Market Index
USDA reports: Export inspections (AMS) | Honey (NASS)

Tuesday, March 19
OECD launches its economic survey.
Japan: A Bank of Japan governor retires, clearing the way for a monetary dove.
Pope installed: World leaders gather for the installation of Pope Francis, 76, in Rome. Joe Biden, first Roman Catholic to serve as vice- president, leads the US delegation to the Holy See.
Aid to rural communities: Committee hearing. Senate Energy and Natural Resources Committee hearing to discuss keeping the federal government's commitment to rural communities affected by federal lands.
Housing finance revision proposals: Committee hearing. Senate Banking, Housing and Urban Affairs Committee hearing titled "Bipartisan Solutions for Housing Finance Reform."
CFPB, SEC nominations vote: Committee markup. Senate Banking, Housing and Urban Affairs Committee will vote on pending nominations. Nominations: Richard Cordray to be director, Consumer Financial Protection Bureau; Mary Jo White to be a member, Securities and Exchange Commission.
Trade agenda: Committee hearing. Senate Finance Committee hearing on the president's 2013 trade agenda.
Sequestration oversight: Subcommittee joint hearing. Economic Growth, Job Creation and Regulatory Affairs Subcommittee and Federal Workforce, US Postal Service and the Census Subcommittee of House Oversight and Government Reform Committee will hold a joint hearing titled "Sequestration Oversight: Understanding the Administration's Decisions on Spending Cuts and Furloughs." Witnesses: David Robbins, managing director, Federal Communications Commission; Michael Young, budget director, Department of Agriculture; Hari Sastry, deputy assistant secretary of Commerce for resource management.
Exporting liquefied natural gas: Subcommittee hearing. Energy Policy, Health Care and Entitlements Subcommittee of House Oversight and Government Reform Committee will hold a hearing titled "The Department of Energy's Strategy for Exporting Liquefied Natural Gas."
Economic reports: ICI weekly money market mutual fund data | Weekly Mortgage Rates (Freddie Mac) | Housing Starts | ICSC-Goldman Store Sales
USDA reports: Milk Production (NASS) | Wheat Data (ERS) | Weekly Weather and Crop Bulletin (WAOB)

Wednesday, March 20
President Barack Obama makes his first visit as US president to Israel.
Markets in Japan are closed for the vernal equinox.
British Finance Minister George Osborne delivers the 2013 budget.
FY 2014 appropriations - CFTC: House Ag Appropriations Subcommittee hearing on Fiscal 2014 appropriations for the Commodity Futures Trading Commission (CFTC). Witnesses: Gary Gensler, chairman, CFTC; Scott O'Malia, commissioner, CFTC.
Swaps and futures bills: Committee markup. House Ag Committee will mark up pending legislation.
Tax treatment of financial products: Subcommittee hearing. Select Revenue Measures Subcommittee of House Ways and Means Committee hearing proposals that would revamp the taxation of financial products.
New immigration system: Committee hearing. Senate Judiciary Committee hearing titled "Building an Immigration System Worthy of American Values."
Economic reports: MBA Purchase Applications | FOMC Meeting Announcement | FOMC Forecasts | Fed Chairman Press Conference
Energy reports: Weekly Petroleum Status Report (EIA) | Weekly ethanol plant production (EIA) | Weekly National Petroleum Report (API)
Transportation: Grain Transportation Report (AMS).
USDA reports: Announcement of Advanced Prices and Pricing Factors (AMS) | National Dairy Products Sales Report (AMS) | Catfish Feed Deliveries (NASS) | Catfish Processing (NASS) | Broiler Hatchery (NASS)

Thursday, March 21

China: New Chinese leader Xi Jinping heads to Moscow to meet Vladimir Putin.
FY 2014 appropriations – USDA Inspector General: House Ag Appropriations Subcommittee hearing. Witnesses: Phyllis K. Fong, inspector general, Department of Agriculture (USDA); Karen Ellis, assistant inspector general for investigations, USDA; Gil Harden, assistant inspector general for audit, USDA.
Economic reports: Jobless Claims (Labor Dept) | PMI Manufacturing Index Flash | Leading Indicators | Existing Home Sales | Phila. Fed Survey | FHFA House Price Index
Energy reports: EIA Natural Gas Report
USDA reports: Export Sales (FAS) | Livestock Slaughter (NASS)

Friday, March 22
Federal Reserve: Fed Governor Sarah Raskin speaks about US labor market conditions.
USDA reports: Chickens and Eggs (NASS) | Cattle on Feed (NASS) | Cold Storage (NASS) | Peanut Prices (NASS) | Hop Stocks (NASS)

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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