The Week Ahead: Jan. 25-31, 2016

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In Washington, digging out from a major blizzard/winter storm will be the focus. Roads were starting to be cleared Sunday. Congress has already canceled several hearings, however. The federal government in Washington is closed Monday, but some government reports may still be released on schedule.

House floor votes pushed to Feb. 1. House Majority Leader Kevin McCarthy (R-Calif.) informed members Sunday that the next votes for the chamber would be pushed off until Feb. 1.

The Senate changed its own plans on Sunday, pushing back a vote on on the nomination of Michael Vazquez to be a federal judge in New Jersey from Tuesday afternoon until 5:30 p.m. ET on Wednesday, giving senators another day to travel back to D.C. Senators will also open debate on a bipartisan energy bill during the week. The measure, S 2012, includes provisions designed to boost efficiency, speed construction of electric transmission lines and streamline permitting for natural gas exports. It had bipartisan support in the Senate Energy and Natural Resources Committee.

Hearings of note this week include a House Ag Committee session Tuesday on the impact to agriculture from EPA actions, with EPA Administrator Gina McCarthy testifying on a topic that should be fairly lively. A hearing Wednesday will examine the Renewable Fuel Standard (RFS) and panels in both chambers will look at the latest update from the Congressional Budget Office on the deficit and economic growth.

Several economic updates arrive this final week of January with more information on consumer activity, housing and the US economy overall. The first update arrives on Monday with the Dallas Fed Manufacturing update, followed by Tuesday releases including the S&P Case-Shiller House Price Index, Consumer Confidence and Richmond Fed manufacturing report. New Home Sales figures arrive Wednesday, with Thursday releases on Durable Goods Orders, weekly jobless claims, Pending Home Sales and the Kansas City Fed manufacturing report. The week closes out with Friday releases on GDP, International Trade in Goods, the Employment Cost Index, Chicago PMI and Consumer Sentiment.

The Chinese situation and oil markets will also stay in focus as traders are still awaiting stimulus actions by China to try and stem the decline in their economy. While crude oil did rise last week, the expectation is that the burdensome supply situation will return as a market focal point. Other economic updates out of Europe could also be key as their central bank is contemplating more help for the euro zone economy.

The big Fed-related focus will be on Wednesday with the conclusion of the Federal Open Market Committee (FOMC) meeting. The Fed is not expected to adjust monetary policy, but the FOMC post-meeting statement will be watched for signs that their attention to the lack of inflation is still there or has increased, and whether the foreign developments become a mention in the statement as well. There are no new projections and no post-meeting press conference, so markets will be left to dissecting the phrasing of the post-meeting statement for clues about the future and what the Fed is most and/or least concerned about. There will be at least one Fed speaker – San Francisco Fed’s Williams – on Friday. He was a 2015 voter, but is typically seen as a centrist and one that is aligned relatively closely with Fed Chair Janet Williams who held the top spot at the San Francisco Fed.

For agriculture, weather remains a key, with South America the main focal point at this stage. There were some concerns about too much rain slowing their early harvest, but a shift in weather forecasts to end the week will keep that as a focal point for the week ahead. From the USDA report side, the agency’s economists will update the food price outlook on Monday with the Weekly Export Sales report released on Thursday. That report has been somewhat volatile in recent weeks for corn and soybean sales, so traders will watch to see if that trend continues. The week closes out with the twice yearly Cattle report, updating traders on the size of the US cattle herd. There the attention will be on herd expansion, particularly after the feedlot update from USDA indicated the percent of heifers in the feedlot mix was the lowest on record for the month.

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