The Week Ahead: July 18-24, 2016

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In Washington, the long, hot summer in DC and political conventions mean things will be relatively quiet on Capitol Hill.

Lawmakers will not return until after Labor Day, but there will be some efforts started on the process of the House-Senate conference committee on the broad energy bill at the staff level.

The Republican National Convention will dominate the airwaves, with a likely law-and-order focus, and no doubt there will be quite a bit of reporting on who isn’t at the Republican party session in Cleveland. But one late speaker is someone who previously said he was not even going to the convention, Sen. Marco Rubio (R-Fla.).

Economic updates in the week ahead will be mostly on housing and some additional regional indicators. Monday will see the release of the Housing Market Index with Housing Starts arriving on Tuesday. The biggest schedule comes on Thursday when weekly jobless claims, the Philadelphia Fed Business Outlook Index, Chicago Fed National Activity Index, FHFA House Price Index, Existing Home Sales and Leading Indicators all are released. Friday’s schedule has the PMI manufacturing flash update being released.

Beyond economic reports, the Brexit situation may well get market attention even though the formal process for the UK’s exit won’t be underway for a while.

Any China economic developments or trade matters could also get market focus.
There won’t be much coming from the US Fed as the blackout period which comes a week before each Federal Open Market Committee (FOMC) meeting arrives on Tuesday. So traders will have to make their own assessments of economic data and how that could play into the Fed outlook as the July 26-27 session gets closer. But there will also be a European Central Bank meeting in the week ahead that will be monitored, especially from the Brexit perspective.

Agriculture will be watching the mercury and the weather forecasts given the outlook for hot temps to be in place for much of the Midwest in the week ahead. Night time temperatures will be another focus, especially for corn. But as we saw in markets to close out the week, any shifts in that outlook will bring a response in markets, so that will keep things interesting as we head into the latter part of July and corn pollination.

From the ag data side, the weekly Crop Progress report Monday will be monitored closely with updates also out from USDA economists on livestock, dairy and poultry along with sugar and sweeteners. Thursday’s Weekly Export Sales report will remain a focal point from the demand side and USDA will release the monthly Milk Production report. Friday will close out the week with the Cattle on Feed and Cold Storage updates. However, the July Cattle report will not come out as it was suspended due to budget at the National Ag Statistics Service (NASS). Foreign weather remains notable, particularly if there are more issues for European – primarily French – wheat in the week ahead. Plus, South America will also stay on traders’ radar.

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