The Week Ahead: January 16-22, 2017

Trump inauguration | Obama’s last press conference | Nomination hearings | Yellen

President-elect Donald Trump’s Friday inauguration, outgoing President Barack Obama’s final press conference on Wednesday, several Senate confirmation hearings and perhaps an announcement of Trump’s last Cabinet position, who will lead USDA, are the Washington highlights for the week ahead.

Vice President-elect Mike Pence told Fox News on Sunday that he and President-elect Donald Trump would “probably have all of them (nominees) named before we get to Inauguration Day.” Pence gave no details of the Agriculture Cabinet search that has caused anxiety among some farm-state lawmakers. Agricultural stakeholders are hoping they will get to start assessing who the next USDA Secretary nominee is, with most growing tired of the wait even as all indications are the incoming administration wants to make sure they get this one “right” given that rural America propelled Trump to the White House.

On January 13, incoming White House Press Secretary Sean Spicer said Trump “understands the importance particularly of ag and trade for that matter to job creation and economic growth in our country. He wanted to make sure that he met with a candidate who understood how to implement his agenda to achieve those goals.”

USDA will continue to run smoothly until a new secretary arrives because it has solid core of career staffers who can handle day-to-day operations, House Agriculture Chairman Mike Conaway (R-Texas) said earlier this month.

Confirmation hearings will be one focus but the big attention point in Washington will be on the inauguration of Donald Trump as the 45th President of the United States on Friday, January 20. That will dominate the Washington scene and override much of the attention in the town.

As for the nomination hearings on tap, they include Interior pick Ryan Zinke (R-Mont.) and Education-designate Betsy DeVos on Tuesday, with hearings Wednesday for Commerce chief nominee Wilbur Ross, HHS pick Rep. Tom Price (R-Ga.) and EPA designate Scott Pruitt. Thursday will see sessions for Rick Perry to head the Energy Department and Steve Mnuchin to oversee the Treasury Department.

Sandwiched in with the nomination sessions is an intelligence panel session and a hearing on regulations and small businesses.

Light economic data week for the holiday-shortened week. Markets and the government were closed Monday in observance of Martin Luther King Jr. Day, compressing the week’s events and updates into four days. But there are some important updates on manufacturing, housing and inflation over just three days. Tuesday opens with the Empire State Manufacturing index, followed by a busy Wednesday schedule that includes CPI, Industrial Production and the Housing Market Index, while the weekly updates wrap up on Thursday with Housing Starts, Weekly Jobless Claims, and the Philadelphia Fed Business Outlook Index. Beyond that, any information coming out of the incoming Trump administration could be noted by markets since they continue to want to hear more details on things like fiscal policy and the promised infrastructure efforts.

Foreign economic news always holds the potential for market attention, though it seems it takes a pretty major shift in any foreign data to impact markets. Plus, the World Economic Forum also has the potential to generate news as it takes place in Davos, Switzerland throughout the week.

Fed Chairwoman Janet Yellen will speak twice in the week ahead, on Wednesday in a California appearance that includes questions and answers from the audience, and then another session in California on Thursday. Either of those could yield some market-moving comments, especially if she shifts from her comments that the US economy is poised for growth ahead.

There will also be some “fresh” Fed voices as well, with Tuesday featuring remarks from two that always vote on Fed policy decisions – New York Fed’s Dudley and Fed Governor Brainard. Their remarks could be especially of note. Also on tap that day is San Francisco Fed’s Williams (2018 voter). Wednesday’s schedule includes Minneapolis Fed’s Kashkari (2017 voter) while Williams is also on the schedule Thursday and Friday. Philadelphia Fed’s Harker (2017 voter) also gives remarks on Friday.

The other attention point will be on the Beige Book, the anecdotal economic recap issued two weeks before each Federal Open Market Committee (FOMC). The watch there will be on what the update says relative to the level of uncertainty or economic expectations for the incoming Trump administration.

With the big batch of USDA data out of the way, attention will remain on weather in South America and other areas. Here in the US, traders will be assessing the weekend precipitation in Plains HRW wheat areas to see if the region may have gotten relief that was forecast. But South American weather continues important for Brazil and Argentina, particularly with reports of planting delays in Argentina from heavy rains. Another interest point in Brazil could be if a partial blockade by truckers there in the main producing state of Mato Grosso continues into next week or expands after reports Friday said 1,000 trucks were stopped by the action.

Some USDA data releases get altered by the Monday holiday as well, with Grain Inspections due on Tuesday and Weekly Export Sales on Friday. The key for the sales data is whether soybean sales continue to slow as has been expected. Another interesting data release from USDA’s Economic Research Service will be figures on the agricultural trade multipliers — the economic impacts from exports of US agricultural products.

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