The Week Ahead: October 10-16, 2016

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Politics is at center stage again as Donald Trump rejected calls to end his presidential bid, saying he has “never withdrawn in my life.’ Several Republican Party leaders have called for the nominee to withdraw after a 2005 video was published showing him bragging in vulgar terms about kissing, groping and trying to have sex with women. Trump acknowledged that the video has consumed the national political scene but said he has endured past controversies, throughout his career. Key USDA reports are on tap Wednesday, with a light schedule for economic reports.

Some Republicans want Trump to step aside – which would allow the Republican National Committee to fill the ticket’s vacancy – and some said Pence, the 57-year-old governor of Indiana who has served as a bridge between Trump and the Republican establishment, should take his place. Other Republican lawmakers said they would write Pence in on their ballot. Influential Republicans have been reaching out to Pence about what role he might be willing to play in the event that Trump drops out.

Even if the RNC could convince Trump to drop out and exercise its authority to fill a vacancy on the ticket, ballots have already been printed and early voting has begun in some states. The party’s Rule 9 addresses replacement of a nominee due to “death, declination or otherwise,” and the party has broad authority to interpret its own rules, though Trump could refuse to acknowledge his removal, sue, and assert a right to receive Electoral College votes, election experts have noted.

A light economic report week is ahead with a holiday Monday. The Columbus Day holiday will see US government offices closed, but markets will be open. The week’s economic reports are pretty much crammed into the final two days of the week, with the Thursday updates including Weekly Jobless Claims, Import & Export Prices and the monthly Treasury budget update. The week wraps up with Friday releases that include PPI-FD, Retail Sales, Business Inventories and Consumer Sentiment. The watch will be on to see if the swoon in the British pound continues or whether the UK currency will find its footing. In the week of the US jobs data, traders will continue to assess every piece of economic data relative to whether it will affect their expectations for when the Fed will adjust short-term interest rates. Assessing the impacts and movement of Hurricane Matthew will also be an early week attention point.

There are Fed officials on the speaking schedule so markets may not be totally on their own in terms of guidance on future Fed policy. Chicago Fed’s Evans (2017 voter) delivers remarks Monday with NY Fed’s Dudley (always a voter) and KC Fed’s George (2016 voter) scheduled to speak Tuesday and Philadelphia Fed’s Harker (2017 voter) on the Thursday schedule. But Friday will be one of the attention points as it features remarks by Boston Fed’s Rosengren (2019 voter) and Fed Chairwoman Janet Yellen will deliver luncheon remarks at a Boston Fed gathering. That will loom large for Fed policy watchers as they try to determine when the Fed will boost rates. Plus, the release of the September Federal Open Market Committee (FOMC) minutes on Wednesday will be dissected for clues on how much of a debate there may have been on increasing rates at that meeting.

Agriculture’s focus will be in large part on Wednesday and key USDA data updates. But the week will start with attention on what kind of damage may have happened with Hurricane Matthew. Some indication could come on Tuesday with release of Crop Progress data, though the hurricane may affect the data from states in the storm’s path. The Monday holiday also moves the Weekly Grain Inspections release to Tuesday and Weekly Export Sales data will arrive Friday morning. But Wednesday’s updates via the Crop Progress and Supply/Demand reports loom large. One key will be the fact that the National Ag Statistics Service (NASS) is expected to use certified acreage data from farmers provided by the Farm Service Agency to update acreage, with higher figures for corn and soybeans expected. Global developments on trade also could be factors, but the USDA data will be the main focal point. Plus, additional farm program payments will start moving out to farmers during the week.

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