The Week Ahead: Feb. 13-19, 2017

Canada, Israel leaders visit White House | Yellen | New farm bill

Attention in Washington will continue to spread beyond President Donald Trump nominees though at least one key nomination hearing is on tap for Andrew Puzder to be Labor Secretary. Meanwhile, Trump meets with Canada’s leader today and Israel’s leader on Wednesday.

The House Agriculture Committee has a busy week with a hearing on the status of the US ag economy as they get ready to launch into the process of writing a new farm bill. And the panel will hold a session on restricting Supplemental Nutrition Assistance Program (SNAP) purchases, while a Appropriations panel subcommittee has a session on oversight of the USDA Office of Inspector General (OIG).

Other hearings on tap include ones on terrorism, the future of the Federal Emergency Management Administration (FEMA), aviation issues, a look at the status of small businesses, the National Labor Relations Board, TSA and traveler safety and the Endangered Species Act.

Plus, the two sessions by Federal Reserve Chairwoman Janet Yellen will garner a lot of attention in Washington and in financial markets.

Inflation, housing and manufacturing updates arrive in the week ahead, setting the stage for a raft of data for markets/traders to digest as they try and figure when the Fed will increase interest rates next. The week starts with the PPI-FD data Tuesday, followed by the busiest day in a while on Wednesday – CPI, Retail Sales, Empire State Manufacturing, Industrial Production, Atlanta Fed Business Inflation Expectations, Business Inventories and the Housing Market Index. Thursday updates scheduled are Housing Starts, Weekly Jobless Claims and Philadelphia Fed Business Outlook Index. The week closes out Friday with Leading Indicators. Traders will still keep their ears perked for any new developments in Washington that relate to tax or spending plans that could impact the US economy as well. Foreign economic updates still have the potential to affect US markets, but their influence is not as great as it was just a few months ago.

Several Federal Reserve officials are on the schedule, but the attention will rest squarely on the two days of monetary policy testimony — the so-called ‘Humphrey-Hawkins’ testimony — from Fed Chairwoman Janet Yellen. Her two sessions will start Tuesday on the Senate side before the Banking Committee and move to the House Financial Services Committee Wednesday. Her testimony will be the initial focus Tuesday along with questions. But barring something major changing her testimony, Wednesday’s session will mostly be a focus on the questions. And ones from House members could touch on a wide range of issues. But Yellen is not the only one speaking. Tuesday will see remarks from Richmond Fed’s Lacker (2018 voter), Atlanta Fed’s Lockhart (retires at end of February) and Dallas Fed’s Kaplan (2017 voter) with Boston Fed’s Rosengren (2019 voter) and Philadelphia Fed’s Harker (2017 voter) on the scheduled Wednesday. Traders will also be monitoring weekend remarks from Fed Vice Chair Fischer.

A relatively light USDA release schedule will mean demand stays as an attention point for markets. That will include the weekly updates on Grain Inspections (Monday) and Weekly Export Sales (Thursday) as traders gauge the level of interest for US commodities from foreign buyers. That also means that the daily sales announcements from USDA will get attention. South American weather is also potentially of note even as recent forecasts have painted a more-favorable picture for crops in the region. Any shift in the outlook could get noticed by markets. USDA will provide an update Friday on Farms and Land in Farms.

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