Next week, the US government shutdown will likely become the longest. The economic calendar shows many economic reports and more speeches from FOMC members. According to Danske Bank analysts, regional surveys from Philadelphia and New York (Empire) should give more clues to how much manufacturing is slowing down.
“In the US, parts of the federal government remains shutdown and we intend to follow the negotiations closely, not only because the shutdown means that official data releases from federal agencies such as BEA, BLS and Census Bureau are postponed but also because an extension of the shutdown increases the risk that it will hurt the overall economy, although this is not our base case.”
“Given the attention on the sharp fall in ISM, watch out for Empire PMI manufacturing and Philly Fed index. In addition, we believe the NAHB Housing Market Index and consumer confidence from University of Michigan will be interesting.”
“Many FOMC members are scheduled to speak next week (ahead of the next FOMC meeting on 30 January) but markets and economists have probably understood by now that the Fed is going to be patient about raising rates again, supporting our call for a summer hike, probably in June. We will mostly keep an eye on comments on the future level of the balance sheet.”