The Week Ahead: July 11-17, 2016

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

In Washington, lawmakers will be gearing up to head out for political conventions and the summer congressional recess, with a seven-week recess in store. But that isn’t keeping the calendar empty as there are several hearings on tap regarding California water, Cuba trade plus sessions on spending bills and some oversight hearings on the House side. The Senate side features a session on appropriations for military construction and an exam of the financial risks of China. The House Ag Committee will look at the Commodity Futures Trading Commission’s plans for automatic regulated trading. And, expectations are the House will be able to take up the GMO labeling bill approved by the Senate July 7.

More consumer information will be on tap in the week ahead, providing some important updates along with information on the inflation front. Monday opens with the Fed’s Labor Market Conditions Index followed by Wholesale Trade on Tuesday. Economic data Wednesday includes Import & Export Prices, The Atlanta Fed Inflation Expectations update and the monthly Treasury budget statement. Thursday’s updates include the weekly jobless claims update and PPI-FD data. Friday is the “busiest” day, featuring CPI, Retail Sales, Empire State manufacturing, Business Inventories and Consumer Sentiment. Focus will be on whether consumer-related data confirm other information pointing to a stronger second quarter of data on the US economy. Also, the inflation data will get noticed by markets. As we saw in the past week, Brexit worries could also creep back into the markets and further the uncertainty created by the situation.

Fed watchers will have plenty to consider as there are several Fed officials on tap to make comments. Monday will see remarks from current voters KC Fed’s George and Cleveland Fed’s Mester, followed by the trio of St. Louis Fed’s Bullard (current voter), Minneapolis Fed’s Kaskari (2017 voter) and Mester on Tuesday. Wednesday appearances are on tap from Dallas Fed’s Kaplan (2017 voter) and Philadelphia Fed’s Harker (2017 voter) followed by two appearances Thursday from Bullard along with ones from Atlanta Fed’s Lockhart (2018 voter), George and Kaplan. The week closes out with another appearance Friday from Kashkari. And with the next FOMC meeting at the end of the month, the Beige Book will be released on Wednesday. Keys to watch will be what the anecdotal recap has to say on inflation, employment and consumer activity.

USDA’s reports Tuesday will be the main focus for agriculture. The reports will see the first survey-based estimate of the US spring wheat and all wheat crops, along with another update on winter wheat. Plus the day also features USDA’s balance sheet updates via the Supply/Demand report. Focus there will be on how USDA analysts incorporate the June Grain Stocks and Acreage updates issued June 30 into their projections for the 2016/17 season, plus adjustments are expected for 2015/16. Weather will stay a focus so the Monday Crop Progress report will keep traders’ attention. Thursday’s Weekly Export Sales report will be combed through for confirmation of continued solid demand for US ag products from foreign buyers. Traders will also watch for harvest updates out of the Black Sea region and Europe.

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