Congress on recess | Trump to G20 in Germany | Fed speakers | Employment report
Congress is on recess for the week and has a slate full of issues to work on when lawmakers return and precious few legislative days to do so before the exit for the August recess.
President Donald Trump will be one of the focal points as he will head to the G20 summit in Germany where he is to meet with Russian President Vladimir Putin and other world leaders on the sidelines of those sessions. The U.S. wants to take a leadership role in pushing efforts to prevent famine, according to the White House.
Even though Congress is out, there will still be work on several issues, including budget and health care.
Key economic updates are ahead in the holiday-shortened week. US government offices and markets will be closed Tuesday for the Independence Day holiday. But the holiday week could have some additional fireworks via economic updates due to be released. Today opens with manufacturing updates via the PMI and ISM manufacturing indexes along with Construction Spending. Wednesday will see release of the Factory Orders update followed by the biggest number of reports for the week on Thursday – ADP Employment, International Trade, Jobless Claims, PMI Services and the ISM Nonmanufacturing Index. Friday is the key day, however, with the June Employment report. That will keep traders anxious, particularly since prior reports have been a bit disappointing or at least have not met expectations.
There are a few Fed speakers on the schedule, with St Louis Fed’s Bullard (2019 voter) on tap to speak Monday. A trio of speakers is on tap Thursday, including San Francisco Fed’s Williams (2018 voter) and Fed Governor Jerome Powell and Vice Chair Stanley Fischer also on the schedule – the latter two key since they are always voters on the Federal Open Market Committee (FOMC). And the FOMC will come into focus once again with minutes of the June meeting to be released Wednesday. The attention will be on the discussion of the timing for what Fed officials predict to be one more rate increase yet in 2017 along with any hints on when the Fed will start tapering their massive $4.5 trillion balance sheet. And Friday will be interesting as the Fed will release the Monetary Policy Report to Congress. The report will be released at 10 a.m. CT Friday, so that members of Congress and the public can review the report ahead of Fed Chairwoman Janet Yellen’s testimony that will start the following week on July 12.
The holiday will alter some of the usual data from USDA, though the weekly Grain Inspections data is still to be released on today. However, the Weekly Crop Progress report will not come until Wednesday nor will the week “industrial” reports that USDA publishes on Grain Crushing, Fats & Oils and wheat usage. The reports are normally released on the first business day of the month but USDA opted to delay them and the week progress update until Wednesday as sort of a “contingency” plan. The progress data will once again be important and traders will likely expect another decline in spring wheat condition ratings since hot, dry conditions have continued in the Northern Plains. Thursday will see USDA release the monthly US agricultural trade update where the focus will be on whether the trade surplus continues to shrink or stay below the $1-billion mark. And the week wraps up with the Weekly Export Sales report on Friday, delayed a day by the Tuesday holiday.
Weather will stay as a factor, not only in the US but also in Europe where dry conditions have also lowered crop ratings.
