Trade Issues Remain Key Washington Focus

Posted on 08/26/2019 6:47 AM

New trade negotiations expected with China as U.S., Japan announce tentative accord

The weekend brought several twists and turns in an already chaotic U.S./China trade relationship. Meanwhile, some positive news surfaced as leaders of the U.S. and Japan announced a tentative trade accord that will bring good news to U.S. farmers and ranchers.


The House and Senate remain on their August congressional recess until Sept. 9.

President Donald Trump returns from the G7 meetings in France following several trade policy developments over the weekend, including a tentative U.S./Japan trade accord expected to be finalized in September, and increased odds that U.S. and Chinese trade negotiators would return to meeting after recent tit-for-tat tariff action.

Several key economic updates this week. Most of the attention this week will be on the second reading of the U.S. economy for the second quarter. Expectations are that second quarter GDP due Thursday will come in at 2%, slightly under the first reading of 2.1%. Inflation will also be watched via the Personal Income & Outlays data Friday, with the core Personal Consumption Expenditures year-over-year change seen only ticking up to 1.7% after being at 1.6% the prior month. International Trade in Goods figures arrive Thursday morning with a near-steady monthly deficit expected.

Other economic updates during the week include a pair of readings on consumer attitudes, data on U.S. wholesale inventories along with regional manufacturing updates and housing price indicators.

A light schedule for Fed officials. San Francisco Fed President Mary Daly is the only Fed official shown on the schedule this week, delivering remarks in New Zealand. Markets still have odds at 95% there will be a 25-basis-point cut to the Fed funds rate in September, with nearly five percent expecting a 50-basis-point trim.

Agriculture reports include updates on trade and financial conditions for farmers. Updates on the U.S. and Canadian cattle and hog herds arrive on Tuesday, with most of the attention Thursday and Friday. USDA will update its Outlook for U.S. Agricultural Trade on Thursday and they are expected to trim the export outlook and potentially raise the import expectations, further trimming the ag trade surplus. Friday’s update on U.S. farm income is expected to show continued financial stress, but it should reflect the impacts of trade mitigation payments to farmers and that will result in a greater share of farm returns coming from the U.S. government.

Monday, Aug. 26

Ag reports and events:

  • Export Inspections
  • Crop Progress
  • Census: American Indian Reservations
  • AmSpec and SGS data on Malaysia’s Aug. 1-25 palm oil exports
  • EU weekly grain, oilseed import and export data
  • EU’s monthly MARS bulletin
  • Holiday: U.K., Ukraine

Energy reports and events:

  • ICE futures and options products will trade regular hours despite U.K. public holiday

Tuesday, Aug. 27

Ag reports and events:

  • U.S. and Canadian Cattle
  • U.S. and Canadian Hogs
  • Livestock and Meat Domestic Data
  • Unica sugar production and cane crush

Energy reports and events:

  • API weekly U.S. oil inventory report

Wednesday, Aug. 28

Ag reports and events:

  • Broiler Hatchery
  • Citrus Fruits

Energy reports and events:

  • U.S. weekly ethanol inventories

Thursday, Aug. 29

Ag reports and events:

  • Weekly Export Sales
  • Outlook for U.S. Agricultural Trade
  • Agricultural Exchange Rate Data Set
  • Peanut Stocks and Processing
  • IGC monthly grains report
  • Port of Rouen data on French grain exports

Energy reports and events:

  • EIA natural gas storage change

Friday, Aug. 30

Ag reports and events:

  • CFTC weekly commitments of traders report on various U.S. futures and options contracts.
  • Peanut Prices
  • Farm Income
  • Dairy Data: Fluid beverage milk sales; Selected soft dairy products; Number and average size of US fluid milk
  • Cattle on Feed
  • Poultry Slaughter
  • Egg Products

Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts
  • EIA Petroleum Supply Monthly

Other reports and events this week include:

Monday, Aug. 26

  • Congress. House and Senate return Sept. 9.
  • G7 confab. President Donald Trump is in Biarritz, France, taking part in G7 including a session on climate biodiversity, a working lunch on digital transformation and attends the closing session and news conference.
  • USMCA. Vice President Mike Pence continues to push the U.S.-Mexico-Canada Agreement (USMCA) fort the administration, making appearances in South Carolina.
  • USDA Secretary Sonny Perdue will tour Roslyn Farm and participate in a roundtable discussion with stakeholders in Charlottesville, Virginia.
  • Energy AI. Energy Secretary Rick Perry participates in a memorandum of understanding signing and discussion on "a public-private partnership to apply Energy Department fueled artificial intelligence capabilities to advanced transformative scientific opportunities in biomedical and public health research,” in Livermore, California.
  • French digital tax. U.S. Trade Representative Bob Lighthizer could take action after a comment period closes on U.S. probe into France’s new three percent digital tax.

Tuesday, Aug. 27

  • International maritime rules. State Department meeting to prepare for the sixth session of the International Maritime Organization's (IMO) Sub-Committee on Carriage of Cargoes and Containers to be held at the IMO Headquarters, United Kingdom, Sept. 9-13, 2019.
  • U.S./China relations. Woodrow Wilson Center's (WWC) Asia Program discussion on "Chilling US-China Economic Relations: Options for Taiwan."

Wednesday, Aug. 28

  • 2020 elections. Deadline for candidates to make the cut for the third debate of Democratic presidential hopefuls. Ten have qualified for the forum in Houston next month; if more than 10 qualify, ABC News will randomly assign participants to one of two nights
  • Federal Reserve. San Francisco Fed President Mary Daly speaks about inflation targeting at the Reserve Bank of New Zealand and the International Monetary Fund Conference in Wellington, New Zealand.
  • Online sales taxes. Senate Small Business and Entrepreneurship Committee field hearing on "Remote Online Sales Taxes: Examining the Impact on Small Businesses of the Supreme Court's Decision in South Dakota v. Wayfair."
  • U.S./Japan relations. Center for Strategic and International Studies (CSIS) discussion on "The Importance of US-Japan-Korea Trilateral Defense Cooperation."
  • Nicaragua and Venezuela. Organization of American States (OAS) Permanent Council meeting to analyze the political and social crisis in Nicaragua and to discuss "a resolution on the human rights situation in Venezuela."
  • Defense budget. Center for Strategic and Budgetary Assessments (CSBA) holds a discussion on a new report, "Did Dollars Follow Strategy: A Review of the 2020 Defense Budget."

Thursday, Aug. 29

  • U.S./Cuba relations. American Security Project (ASP) book discussion on "The Cuba/U.S. Bilateral Relationship: New Pathways and Policy Choices."
  • African growth. Society for International Development, Washington, DC, Chapter (SIDW) holds a discussion on "The Role of the U.S. African Development Foundation in African Economic Growth and Development."
  • Trump tax records. District Judge Carl Nichols to hear arguments in case related to Trump’s attempt to block New York from handing his tax records to congressional Democrats.

 

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