Congress out | Perdue RV tour continues | U.S.-China | USDA reports on Thursday | Fed speakers
Washington will be a lot quieter with the Senate joining the House for the August congressional recess.
There still will be some events of note ahead, including USDA Secretary Sonny Perdue holding a press teleconference from Illinois where he will continue his RV tour in rural areas of the country. The U.S.-China Economic and Security Review Commission meet for two days to prepare their report to Congress on the situation in China.
President Donald Trump will be out of Washington vacationing at his golf resort in New Jersey, but he could always take to Twitter and liven things up. And the Senate will actually periodically meet over the coming weeks, a procedural move to keep the president from making any recess appointments.
Key USDA report this week. Thursday is the big day for agriculture as USDA will issue its first survey-based estimates for spring-planted crops like corn and soybeans. Plus, USDA will also update their wheat forecasts for the 2017 growing season. Traders are expecting to see a corn yield that is under the one USDA has released thus far that is a formula-based figure and it not based on any farmer interviews or field surveys.
The resulting crop estimates will be plugged into the balance sheets for U.S. and global crops via the Supply/Demand update out that morning as well. Then in the afternoon, the first of several monthly installments of the certified acreage data from the Farm Service Agency will arrive and will be watched for what it may signal for any potential changes to planted acres from the levels reported by USDA in the June Acreage report.
Weather will stay a focus, but will not get a lot of attention unless it shifts from the current outlook that paints a non-threatening outlook for crops right now.
Today’s updates on Crop Progress and Grain Inspections remain important along with the Weekly Export Sales figures on Thursday morning.
Updates on inflation and consumer credit are the main economic highlights ahead. The week opens with the Labor Market Conditions Index and Consumer Credit updates on Monday with Productivity & Costs and Wholesale Trade on Wednesday. Thursday reports include Weekly Jobless Claims, PPI-FD and the monthly Treasury Budget update with the lone Friday update being CPI. While the two inflation readings are not the ones closely followed by the Fed, they will still be dissected to see if there is any sign that inflation is finally perking up. If not, that will raise more questions about the Fed’s rate rise plans ahead.
Markets will have Fed comments to monitor as there are a few Fed speakers on the schedule. Those include Monday appearances by St Louis Fed’s Bullard (2019 voter) and Minneapolis Fed’s Kashkari (current voter), followed by Chicago Fed’s Evans (current voter) on Wednesday and New York Fed’s Dudley who always is an FOMC voter. The week closes out with Dallas Fed’s Kaplan (current voter) and Kashkari on Friday. How these officials characterize the recent jobs data in the context of how it could impact Fed decisions ahead will be key. Plus, markets will be monitoring their comments for any signals on timing of either rate hikes or when the Fed will start tapering their massive balance sheet.
