The Week Ahead: October 3-9, 2016

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The House is in recess until after elections and is scheduled to return November 14. The Senate is not in session until November 15 except for pro forma sessions, during which no business is expected. Key focus this week is the vice presidential debate on Tuesday, with Friday’s Employment report the major financial report on tap.

With lawmakers on the campaign trail until after the November elections, that will put most of the attention over the coming weeks on the close races for the Senate and the House and of course on the presidential contenders as they make their way around the country to press their case with voters. The next televised presidential debate comes October 9, but the two will continue to spar in the press.

More key economic reports arrive in the first week of October, with most of the focus being on Friday with the key jobs data. But ahead of that will be other important pieces of the economic puzzle. Monday will see the release of the PMI and ISM manufacturing updates along with Construction Spending. Wednesday releases include ADP Employment, International Trade, PMI Services, Factory Orders and the ISM non-manufacturing index followed by Weekly Jobless Claims on Thursday. Friday of course brings the September Employment report along with the latest update on Consumer Credit. Key is whether the mixed trend that we’ve seen in the economic data continues or if the expected upturn in US economic activity in the third quarter becomes move evident.

There are more than a few Fed speakers on the docket, including current voters on the Federal Open Market Committee (FOMC). Tuesday’s schedule includes Richmond Fed’s Lacker (2018 voter) and Chicago Fed’s Evans (2017 voter) with Minneapolis Fed’s Kashkari (2017 voter) and two more appearances by Lacker on Wednesday. Friday could be an interesting day with the key jobs report on tap as four current voter are scheduled to make appearances – Fed Vice Chair Fischer, Cleveland Fed’s Mester, KC Fed’s George and Fed Gov. Brainard. Only Brainard has been sounding caution on raising rates so her comments will be closely followed. The other three speakers on Friday are already on the record as either pushing for a rate rise now – Mester and George –giving signals the time is close for a rate increase in the case of Fischer.

Harvest progress for US corn and soybeans should show solid gains in the Monday Crop Progress report, with other data releases that day including the industrial reports USDA releases on grain crushings, fats & oils crush and cotton use. The stocks data released earlier in the day could have some looking for hefty soybean crush figures in the update. But the main attention will be on the harvest update with open weather the last week of up September in many areas of the Corn Belt. US agricultural trade data will be released on Wednesday followed by the Weekly Export Sales report on Thursday. With the daily sale of US corn to Mexico announced September 28 being the fourth largest on record, that means the corn total will be lofty. And traders continue to export strong soybean sales as well. As the week winds down, traders will shift their focus ahead to the following week with the USDA Crop Production update. Plus, the annual payments under the Conservation Reserve Program (CRP) and some 2015-crop farm program payments will start rolling out the door as October gets underway.

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