The Week Ahead: September 26-October 2, 2016

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With just days remaining in Fiscal 2016, attention in Washington will be on working out a continuing resolution (CR) to keep the government funded starting October 1. That process has stumbled but is expected to regain traction this week as lawmakers eye the deadline. Tonight brings the first of three presidential debates.

Also on the congressional agenda is a House Rules Committee session Monday on the Water Resources Development Act (WRDA) with hearings the rest of the week on biosecurity labs, Libya, FBI oversight and the 2020 Census. Lots of attention will be on the Wednesday hearing where Fed’s Yellen testifies on the banking system. The Joint Economic Committee will examine the US economic recovery. In the Senate, hearings are on tap regarding oversight of the Federal Trade Commission as well as the situation in Syria.

Some key economic updates arrive in the final week of September, including ones on housing, manufacturing and the US economy overall. Monday will see New Home Sales and the Dallas Fed manufacturing updates released, followed by the S&P Case-Shiller House Price Index, PMI Services flash reading, Consumer Confidence and the Richmond Fed manufacturing report on Tuesday. Wednesday’s release is the Durable Goods Orders update followed by scheduled Thursday reports on GDP, International Trade in Goods, weekly jobless claims and Pending Homes Sales. The Personal Income & Outlays report marks the Friday releases along with the Chicago PMI and Consumer Sentiment readings. As usual, the data will be dissected with an eye on how the markets expect the information will impact the Fed’s decision-making process ahead. But, they may not be on their own completely in assessing the data and trying to handicap the Fed’s next move.

There are host of Fed speakers on the schedule, including Fed Chairwoman Janet Yellen. Leading off the week will be appearances by Minneapolis Fed’s Kashkari and Dallas Feds Kaplan (both 2017 voters), with Kashkari and St Louis Fed’s Bullard (2016 voter) on the docket for Wednesday along with Chicago Fed’s Evans (2017 voter), Cleveland Fed’s Mester and KC Feds George, the latter two being 2016 voters and dissenting votes on the FOMC meeting September 21. Philadelphia Fed’s Harker (2017 voter), Atlanta Fed’s Lockhart (2018 voter), Fed Gov. Powell and another appearance by George will be key, but the big attention will be on the morning testimony of Fed Chairwoman Janet Yellen and her late afternoon appearance via video at a KC Fed forum. Comments from the Fed officials on the September 21 FOMC conclusion and when they expect interest rates to go higher will be the focal points as the various officials make their comments.

Weather will stay as a focus for agriculture markets, particularly if the rains forecast on the weekend continue well into next week and engulf a broader area of the Corn Belt. Right now, improved conditions are in the cards as the month winds down, so traders will watch to see if that happens. As for USDA data, there will be more than a few updates. The week opens with Crop Progress on Monday followed by the Thursday Weekly Export Sales update where the attention in both cases will be on corn, soybeans and wheat. But the big day is Friday, when USDA issues the Small Grains Summary, Grain Stocks and Quarterly Hogs & Pigs data. The stocks update will set the 2015/16 carryover levels to which USDA analysts next month will have to meld into their balance sheet updates and the small grains data will be the final update on the 2016 wheat crop until January 2017.

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