What will markets be watching in the week ahead

1) NAHB Housing Market Index

The economic calendar is light in the week ahead and that's true on Monday as well as the NAHB data vies with the Empire Fed for attention. I'll be more focused on housing because -- as Harker warned Friday -- there are signs that US house prices are accelerating. I believe 2017, 2018 will see larger-than-expected US house price rises and that's what's likely to keep growth strong.

2) Industrial production

On Tuesday, the April report on industrial production is expected to show a 0.4% rise m/m. Factories have been never been as big of a contributor as hoped in the post-crisis era. The stakes are low here but rising optimism since the election could lead to an upside surprise that would get Q2 growth on track.

3) Fed's Mester

On Thursday a speech from Mester on monetary policy is due. She's one of the more hawkish FOMC members so talk of rate hikes is highly likely. I'll be watching to see if she scales it back at all in light of softer economic data. Her hawkish colleague Esther George last week noted that vehicles sales raised concerns about the consumer. Other Fed speakers on the schedule next week include Williams and Bullard.

4) Weekly oil inventories

On Friday, Baker Hughes revealed that drilling rigs rose for the 17th consecutive week as US producers fill after OPEC cuts. But last week, inventories fell the most in 2017. What's happening? It's the start of summer driving season and how it shakes out will let us know if the oil market is really headed towards balance. Expect another volatile week in crude trading.