Agriculture
Wheat remains a weather market, but the sellers were worried about the demand side being very weak. less General Comments: Wheat markets were sharply higher early yesterday only to closed mixed. Corn prices are high so demand for feed wheat could increase.
Currencies
That said, the broader DXY Index did come under pressure headed into the Fed decision with US Dollar weakness led by USD/CAD selling and EUR/USD buying. Recent US Dollar weakness against the Loonie likely follows diverging monetary policy paths between the Federal Reserve and Bank of Canada. Here, understand Chair Jerome Powell’s comments provides reasons to continue seeing the dollar fall and EUR/USD rise. This was widely expected by markets, which in turn, is resulting in an overall muted reaction by the US Dollar.
We outlined this bearish USD/CAD scenario in our US Dollar outlook published yesterday. Source: Bloomberg In that same period, the dollar has dropped 1% as bonds, bullion, and big-caps have all risen around 2%… We target 1.15-1.16 in EURUSD.
We outlined this bearish USD/CAD scenario in our US Dollar outlook published yesterday. Source: Bloomberg In that same period, the dollar has dropped 1% as bonds, bullion, and big-caps have all risen around 2%… We target 1.15-1.16 in EURUSD.
Metals
Despite the old adage, I believe the medium-term outlook is still bullish for risk assets and not least for commodities particularly copper, softs, and lumber. The outlook for gold deteriorated during the second half of yesterday‘s trading as copper gave up some of its gains while long-dated Treasuries plunged. In the first quarter, silver stocks were part of the “fake-out breakout” when some news media outlets said Redditors were targeting that sector next.
Namely, since long-dated yields have barely moved thus far and copper almost erased its overnight losses already. The situation is far from bleak – gold is nibbling at the bearish gap, but it‘s the miners that are providing more than a glimmer of hope. Ultimately, a short-lived move would happen in silver, but nothing to the extent of where GME, KOSS, NOK, EXPR, and countless others had experienced.
Namely, since long-dated yields have barely moved thus far and copper almost erased its overnight losses already. The situation is far from bleak – gold is nibbling at the bearish gap, but it‘s the miners that are providing more than a glimmer of hope. Ultimately, a short-lived move would happen in silver, but nothing to the extent of where GME, KOSS, NOK, EXPR, and countless others had experienced.
United States
Despite repeated assurances from the Chairman that the Fed remains committed to a “lower for longer” policy, reporters will undoubtedly probe the nuances about transitory inflation and full employment. The Fed is also clear that the only true inflation, is inflation stemming from a tight labour market. The Fed still looks for actual substantial progress, not forecasted substantial progress. Circling back to the big picture, the Fed Chair repeated the mantra that the Fed will only move when “substantial progress has been made” without providing clear details.
Mr. Powell had said previously that any tapering in bond buying would likely come before the Fed raises its short-term interest rate target. If we get 2-3 months of significant labour market progress, this may test the current Fed stance. The US is now about to reap the growth rewards of the experimental policy mix of massive money printing and wide scaled fiscal stimulus. less The inflation rate will increase markedly above 2% but the Fed considers it transitory due to bottlenecks and base-effects.
Investors were also hoping that recent improvements would encourage Fed Chairman Powell to hint about tapering but he didn’t take the bait. Could the labour market return to strength much earlier than the Fed thinks? less Investing.com Follow This time, there isn’t much excitement ahead of Apple’s (NASDAQ:AAPL) latest earnings report. This time, there isn’t much excitement ahead of Apple’s (NASDAQ:AAPL) latest earnings report.
Could wage inflation show up MUCH earlier than the Fed anticipates? However, as investors look ahead, the Federal Reserve’s (Fed) decision-making process could definitely become more nuanced, creating the potential for more UST 10-Year yield volatility. USD-comeback to be driven by much higher growth in the US compared to peers? The big risk is now if the Fed underestimates the roaring comeback that employment may make over summer. The S&P 500 keeps pushing for new all-time highs, and today‘s Fed isn‘t likely to change that materially.
The Fed has been trying to make inflation happen for years with no luck.
The Fed has hitched its policy wagon directly to the Covid-19 situation, and rightfully so. Yes, stocks are moving overall up as we approach the Fed statement and press conference.
Mr. Powell had said previously that any tapering in bond buying would likely come before the Fed raises its short-term interest rate target. If we get 2-3 months of significant labour market progress, this may test the current Fed stance. The US is now about to reap the growth rewards of the experimental policy mix of massive money printing and wide scaled fiscal stimulus. less The inflation rate will increase markedly above 2% but the Fed considers it transitory due to bottlenecks and base-effects.
Investors were also hoping that recent improvements would encourage Fed Chairman Powell to hint about tapering but he didn’t take the bait. Could the labour market return to strength much earlier than the Fed thinks? less Investing.com Follow This time, there isn’t much excitement ahead of Apple’s (NASDAQ:AAPL) latest earnings report. This time, there isn’t much excitement ahead of Apple’s (NASDAQ:AAPL) latest earnings report.
Could wage inflation show up MUCH earlier than the Fed anticipates? However, as investors look ahead, the Federal Reserve’s (Fed) decision-making process could definitely become more nuanced, creating the potential for more UST 10-Year yield volatility. USD-comeback to be driven by much higher growth in the US compared to peers? The big risk is now if the Fed underestimates the roaring comeback that employment may make over summer. The S&P 500 keeps pushing for new all-time highs, and today‘s Fed isn‘t likely to change that materially.
The Fed has been trying to make inflation happen for years with no luck.
The Fed has hitched its policy wagon directly to the Covid-19 situation, and rightfully so. Yes, stocks are moving overall up as we approach the Fed statement and press conference.
China
Sam Fazeli Beijing is pushing tycoons out of power in Hong Kong.
Europe
Elisa Martinuzzi Mario Draghi needs the ECB s help keeping borrowing costs low as he spends billions in stimulus. Marcus Ashworth Both the U.K. and EU get the AstraZeneca vaccine wrong; the U.K. is too reckless, while the EU is too cautious.
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