The Week Ahead: Aug. 15-21, 2016

Posted on 03/09/2017 10:26 AM

Election strategies | Housing updates | FOMC | Weather

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Washington's attention will remain on the presidential campaigns and how the respective candidates are being received by voters, and whether there any new developments that could pose challenges for the candidates. Some additional attention may also start to be focused on how the presidential elections could end up impacting the "down ballot" contests in the US Senate, where Republicans have a hefty number of seats to defend.

We are into the time period with more housing updates along with some initial readings on manufacturing as we move to mid-August. The schedule is not overly heavy, however, with the reports clustered on three days. Monday opens with the Empire State Manufacturing update and the Housing Market Index. Tuesday will see the consumer-level inflation update via CPI, along with Housing Starts and Industrial Production. Thursday updates will include weekly jobless claims, the Philadelphia Fed Business Outlook index and Leading Indicators. Additional economic data out of China could get some market notice, but even disappointing readings of late have been mostly ignored. So the attention will mostly likely stay on whether US economic data backup market expectations on the potential for the US Fed to increase the range on short-term interest rates.

Fed watchers will feel a little more "normal" this week as some Fed officials are on the schedule ahead. On Tuesday, Atlanta Fed's Lockhart appears (2018 voter) and St Louis Fed's Bullard (2017 voter) is on the schedule for Wednesday, followed by San Francisco Fed's Williams (2018 voter) on Thursday. But the bigger attention will come on Wednesday when the minutes of the Fed's most recent meeting arrive. There the focal point will be what the recap says about the debate on whether to increase rates and perhaps provide some additional clarity on that topic.

Commodity traders will shift the attention back to weather and demand in the wake of the USDA reports that closed out last week. The demand focus will be on how much of the huge corn and soybean crops can be shipped to foreign buyers in the year ahead. Weather will also be watched in case the outlook suddenly shifts from what has been a crop-beneficial pattern. There will be the usual USDA updates, including Monday's Crop Progress data which has shown lofty crop ratings for several weeks. The Weekly Export Sales update remains key, especially with traders aware of the big level of outstanding soybean sales still on the books for 2015/16. The week will wrap up with the monthly Cattle on Feed and Milk Production updates on Friday.


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



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