The Week Ahead: May 9-15, 2016

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In Washington, lawmakers return from their week-long break. Ag interests will pay attention to any developments on the GMO labeling front in the Senate while the House side has a host of hearings on tap. Sessions include focuses on health care, the US Postal Service, the defense appropriations measure and the House Ag panel will take a look at the Supplemental Nutrition Assistance Program (SNAP) from the perspective of retailers. Over on the Senate side, their hearing schedule is mostly on one area – the Defense Authorization measure which is the topic for several days of markup sessions.

The economic calendar is relatively light early in the week, but as the week wraps up we get into some more information on consumer activity and inflation. Today opens with the Labor Market Conditions Index followed by Wholesale Trade data on Tuesday. Wednesday’s schedule includes the monthly Treasury budget update with Thursday reports on weekly jobless claims and Import & Export Prices. The big day for the week is Friday which will see the release of Retail Sales, PPI-FD, Business Inventories and Consumer Sentiment. China data always has the potential to grab markets’ attention, particular with global economic worries appearing to be on the rise over the past week in particular.

There are several Fed speakers on the schedule, with today’s schedule including remarks by Chicago Fed’s Evans and Minneapolis Fed’s Kashkari, both voters in 2018. Thursday will see a Fed trio, with all of them voters this year – Cleveland Fed’s Mester, Boston Fed’s Rosengren and KC Fed’s George. Mester and Rosengren will be most followed out of that batch given George’s dissent at the last two Fed meetings as she wants rates to be increased again already. Friday’s speaker is San Francisco Fed’s Williams, a 2018 voter, who has been indicating he might back a rate rise in June, but that was before the April jobs update.

USDA will release its first survey-based estimate of the US winter wheat crop Tuesday along with their first official projections on US and global balance sheets for the 2016/17 marketing year, with the latter expected to show larger supplies of corn and wheat leftover compared to 2015/16. While the Tuesday reports will capture most of the attention, traders will still carefully monitor today’s release on Crop Progress, which is likely to show another solid gain for both corn and soybean plantings. And Thursday’s Weekly Export Sales report continues to be watched, especially since recent updates have indicated the US is getting some additional export business due to weather issues in South America.

Traders will also watch the process in Brazil relative to whether or not the country’s president will face impeachment, something which could increase market unease and depending on the impact it has on currencies, could send still-more business toward the US.

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