The Week Ahead: July 25-31, 2016

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Congress remains out until Sept. 6, but the focus will be north of Washington, DC in Philadelphia where the Democratic National Convention will run through Thursday, culminating with Hillary Clinton accepting the party’s nomination for president. Pre-convention glitches already occurred with the head of the Democratic National Committee announcing she would resign after the convention due to release of embarrassing emails.

On the congressional front, staff work in Congress will continue to things like the overall energy package which the House and Senate will go to conference on when they return in September.

More housing and manufacturing updates are on tap in the week ahead. Things open up Monday with the Dallas Fed manufacturing index, following by a hefty schedule of data on Tuesday that includes the S&P Case-Shiller house price index, PMI Services Index, New Home Sales, Consumer Confidence and the Richmond Fed manufacturing report. Wednesday’s releases include the Durable Goods update and the Pending Home Sales Index followed by Thursday updates on International Trade in Goods, weekly jobless claims and the KC Fed Manufacturing report. The week closes out with key updates, including GDP, the Employment Cost Index, Chicago PMI and Consumer Sentiment. Chinese economic updates are also potential market movers while energy markets will keep their attention on the crude supply situation.

Key day on the Fed front is Wednesday, with the conclusion of the Federal Open Market Committee (FOMC). No Fed policy changes are expected, but the post-meeting statement looms large. The focus there will be on whether the Fed sends signals about future rate hikes, potentially indicating that a rate rise could be in the offing sooner than markets expect. Since there is no press conference from Fed Chairwoman Janet Yellen, that post-meeting statement looms large. The focus then will shift quickly to Friday when the FOMC blackout period is lifted and two Fed speakers are on tap – San Francisco Fed’s Williams (2018 voter) and Dallas Fed’s Kaplan (2017 voter). Key there will be whether they echo the post-meeting statement sentiments, especially if that statement signals rate increases could be on tap sooner than markets expect.

Crop condition ratings will be one key for the week ahead, particularly since hot temps were in a big chunk of the Midwest. How those stack up to expectations will be important for traders, especially if they show any deterioration. Demand for US corn, soybeans and wheat will be important, particularly as the data of late has shown big sales of US soybeans to foreign buyers, information which will be released on Thursday. Other updates from USDA on the week will include food prices on Monday, Ag Chemical Usage on Tuesday and Ag Prices on Friday.

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