Perspective: Morning Commentary for September 22

By: Arlan Suderman, Chief Commodities Economist

Thu, 22 Sept 2022, 13:29

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 22 – Stock futures are trying to recover this morning, following fresh lows for the move in overnight trade after the Federal Reserve came out of its latest policy meeting more hawkish than Wall Street expected on Wednesday afternoon. The VIX is trading closer to 28 this morning, after spiking above 30 yesterday in an escalation of recession worries. The dollar index posted a fresh 20-year high near 111.8 overnight, although it has come well off its session highs to trade near 110.8 at this hour. Yields on 10-year Treasuries are trading above 3.64%, setting a new 11-year high in the process. Yields on 2-year Treasuries are trading near 4.10%, after posting a fresh 14-year high above 4.13% overnight. Crude oil prices are bouncing this morning as tensions in the Black Sea Region continue to escalate, while the grain and oilseed markets are mixed to higher as well.

The Japanese yen fell to a record low versus the U.S. dollar overnight after the Bank of Japan failed to raise its benchmark interest rate. Japan was the outlier among major developed economies. A half-dozen central banks around the world followed the Fed’s example overnight by raising their rates, trying to help their currencies keep pace with the rapidly rising dollar. The dollar continues to push higher overall as the Federal Reserve ramps up interest rates to curb inflation. The Fed raised its benchmark rate by another 75 basis points as expected on Wednesday afternoon, but it also signaled that it intends to raise rates in future meetings by more than market participants expected. The Fed’s famous dot plot graphic suggests expectations for another 125 basis points to be added to rates by the end of the year, with additional rate hikes possible next year as well. This keeps recession fears foremost on the minds of Wall Street traders as they worry about the harm that high rates can inflict on the economy. Many economies are running low on foreign exchange reserves as they try to prop up their currencies. This creates challenges for emerging economies with large amounts of dollar-denominated debt, raising fears of a global credit crisis. Nonetheless, the Fed is determined to bring inflation under control sooner rather than later, as it should be, although it is yet to be determined if it is choosing the correct pace in these unprecedented circumstances. That’s because we have yet to see the impact of the Fed’s balance sheet tightening in tandem with the rate hikes.

First-time claims for unemployment benefits totaled 213K in the week ending September 17, coming in below analyst expectations of 220K claims. The previous week was revised to 213K, up from the 208K originally reported. Yet, the four-week moving average fell to 216.75K claims, down from 222.75K the previous week. Continuing claims in the week ending September 10 fell 22K to 1.379 million, which remains at a historically low level. This suggests that the jobs sector remains very tight, supporting ongoing wage inflation in the workforce. That suggests that the Fed has more work to do to bring inflation under control.

Draft-age Russians are fleeing the country following this week’s reinstatement of mandated service to support the invasion of Ukraine. Reuters reports that anti-war protests in 38 Russian cities resulted in the arrests of 1,300 people – many of whom were told to report to duty. Airfare out of Moscow soared above $5,000 for one-way tickets to the nearest foreign locations, with every seat sold for the coming days. Traffic was also congested at border crossings into Finland and Georgia. Meanwhile, Ukraine President Zelenskiy addressed world leaders virtually at the U.N. General Assembly in New York, urging the U.N. to create a special tribunal and to strip Russia of its Security Council veto power. The risks are rising that we could see Russia take steps to shut down the “safe corridor” export shipment from three of Ukraine’s ports, leaving Ukraine dependent again on land exports to the west.

The equity markets are trading just above their summer lows once again as Wall Street prices in expectations of a deeper recession. The equities tend to price in recessions quicker than do the commodities. Individual commodities can still rally in the midst of this reset if they have a fundamental strong story, but they must do so going against the headwinds of fear. Wheat tends to see significant corrections lower in recessions, despite it being a staple food commodity. As such, it saw a bit of a pullback overnight following notable gains of the past couple of sessions, while corn and soybean prices attempted to bounce. Global commodity supplies are basically trading at just-in-time inventory levels, with weather and geopolitical risks still very much of a threat. However, the predominant over-shadowing concept in the markets currently is the risk of global recession that reduces demand for the basic commodities, making fund managers reluctant to build ownership of them.

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Perspective: Morning Commentary for August 12

August 12 – Today’s focus is on inflation, with the July consumer price index data out this morning. We have this, and one more month of data, ahead of the next Federal Reserve meeting. Of course, headlines from the Middle East and the Black Sea wars also have an ongoing influence on the markets. Stock futures posted gains this morning, while the VIX traded just below 15. The dollar index traded near 99.7. Yields on 10-year Treasuries are trading near 4.66%, while yields on 2-year Treasuries are trading near 4.18%. WTI crude oil is trading near $83, while Brent trades near $88 per barrel. The grain and oilseed markets rebounded from yesterday’s losses ahead of today’s highly anticipated WASDE crop report that is due out at Noon Eastern Time.

Arlan SudermanWed, 12 Aug 2026, 13:33

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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Perspective: Mid-Day Commentary for August 10

August 10 - Stocks traded quietly mixed to weaker through much of the morning as investors weigh Middle East war / peace headlines with artificial intelligence concerns / opportunities. Ironically, the VIX is trading near 15, putting it just barely above 2026 lows, despite the high level of geopolitical risks and AI concerns. The dollar index continues to consolidate largely between 99.5 and 100.0 after the late July break in what appeared to be Japanese central bank currency intervention. Yields on 10-year Treasuries are trading near 4.70%, while yields on 2-year Treasuries are trading near 4.24%. WTI crude oil is trading near $81 at this hour, while Brent trades near $87 per barrel on the geopolitical risks. The grain and oilseed markets are mixed ahead of Wednesday's big USDA WASDE crop report.

Arlan SudermanMon, 10 Aug 2026, 17:02

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