Daily Close | Forex, Metals, Oil, Agriculture July 28, 2021

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Agriculture

less General Comments: Winter Wheat markets were mixed yesterday as SRW closed a little lower and HRW and HRS closed a bit higher. World prices might have bottomed and should start to move higher, supporting Wheat futures markets in the US. Yield reports have generally been good in Winter Wheat areas but there have been mixed results reported in some Great Plains states. US White Winter Wheat production is also being hurt and impacted by drought and heat this year.

Currencies

As such, gold price action is facing downward pressure as the US Dollar surges across the board of major currency pairs.

United States

Some said they are watching the Fed for signs of how it will balance efforts to achieve full employment with recent data showing inflation running hot. Specifically, the Fed acknowledged that the economy has made progress toward its maximum employment and price stability goals. The Fed started by (of “substantial further progress”) and enacted a permanent backstop for money markets (with a permanent domestic and foreign repo facility). Interesting months are upcoming.Tapering is moving closer as the Fed finds that the economy has made progress towards the goal.
The increasing WAM of the SOMA-portfolio could be an early sign that the Fed intends to maturity-sugarcoat a tapering process that arrives earlier than anticipated. We find the current Fed stance USD positive with continued curve flattening in 5s30s and clear risks of higher belly rates. The Fed has debated these standing repos almost since September 2019, when the lack of liquidity led to rising repo rates.
Finally, the surging usage of the ON RRP (reverse repo) facility at the Fed causes a lot of debate currently. This likely also means that the Fed can taper before reaching its goal on employment. That all said, traders now shift focus to Fed Chair Powell who is due to speak at his follow-up press conference at the bottom of the hour. They expect — and get — a dovish Fed, but their expectations often run ahead of the comments that follow the meeting. Note however, that the services surplus peaked in January of 2018, right about when Trump launched his massive trade wars with the world.
It is clear that investors like the overall message from the Fed, just not immediately. It looked like shares of (Nasdaq: AAPL) were going to break critical support around the $142.50 level. We expect the Fed to be able to finalize tapering by the summer of 2022. Trump made his “”trade wars are good and easy to win” Tweet on March 2, 2018. According to their website, “The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision.
He has been quoted in a variety of financial news publications, such as CNBC, the Wall Street Journal, and the New York Post. It’s true that Trump reduced the goods and services deficit with China, but imports shifted to Vietnam, Taiwan, Mexico, and other places. Biden is even more committed to economic madness than Trump!

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