Perspective: Morning Commentary for August 14

By: Arlan Suderman, Chief Commodities Economist

Thu, 14 Aug 2025, 13:34

August 14 – Stock futures continued to flirt with record high levels overnight, as the economy continues to churn along despite all of the ongoing uncertainty of President Trump’s trade policies. However, this morning’s wholesale inflation numbers threw cold water on those bullish ambitions, with inflation coming in hotter than anticipated. Overnight gains were quickly extinguished by the higher inflation data this morning. The VIX is trading near 15 – still low, but slightly elevated. The dollar index is trading near 98.0, after following Treasury yields higher after the inflation data was released. Yields on 10-year Treasuries are trading near 4.26%, while yields on 2-year Treasuries are trading near 3.73%. Crude oil prices are bouncing 1% this morning, after their recent slide to $62 per barrel, while the grain and oilseed markets came under pressure overnight.

The headline producer price index surged by 0.9% month-on-month in July, after being flat in June. Today’s number blew away analyst expectations of 0.2% gains. The PPI grew 3.3% year-on-year in July, up from 2.3% the previous month, and beating analyst estimates of 2.6%. The core PPI that excludes the more volatile food and energy sectors also rose 0.9% on the month in July, after being flat in June, beating analyst expectations of 0.2% gains. The core PPI rose 3.7% year-on-year in July, up from 2.6% the previous month. Goods inflation at the wholesale level rose 0.7% on the month and 1.9% year-on-year, up from 0.3% and 1.7% respectively the previous month. Inflation in the service sector at the wholesale level rose 1.1% on the month and 4.0% on the year in July, up from -0.1% and 2.7% respectively in June.

This is a hot inflation report. The year-on-year increase in the headline PPI inflation number was the largest rise that we’ve seen since February. The initial response is – here comes the inflation of the tariff war, and there was some of that. But there were also several factors outside of the tariff war that contributed to inflation running hot last month at the wholesale level. Trade services margins were on the rise – posting 2% gains – as the industry implements President Trump’s tariffs. Inflation in the service sector provided much of the impetus for today’s higher inflation number, posting the largest year-on-year gain since March 2022 by gaining 1.1%, while trade services rose 2%. A 3.8% rise in machinery and equipment wholesaling accounted for 30% of the gains in the service sector. Portfolio management fees rose 5.8%, while airline passenger services were up 1%. We saw a modest decrease in the odds of a Fed rate cut trade following the data release, but the greater concern is that this data flows into PCE data that will be released later this month, which is data that is more closely followed by the Fed. Is this enough to derail a September rate cut? Probably not by itself, but now more emphasis will be put on the PCE data and on the August jobs numbers to help tip the scale.

First-time claims for unemployment benefits slipped to 224K in the week ending August 9, down from 227K the previous week, and below analyst expectations of 230K. The four-week moving average rose slightly to 221.75K claims, up from 221K the previous week. Continuing claims fell to 1.953 million in the week ending August 2, down 15K from the previous week. The four-week moving average for continuing claims rose by 500 to 1.951 million. Initial claims for unemployment benefits filed by former Federal civilian employees in the week ending August 2 fell by 71 to 637. Continuing claims by former Federal civilian employees in the week ending July 26 rose by 362 to 8,193. This is largely a neutral report.

Bank loans tell us a lot about what’s going on in China. Demand for financing fell to a 20-year low in July as businesses and consumers focused on paying down debt rather than taking out new loans to finance expansion. Medium to long-term loans dropped by 260 billion yuan ($36.2 billion) in July, after rising by 130 billion yuan in the same period last year. Meanwhile the government issued 1.2 trillion yuan ($167 billion) in debt certificates in July, representing an 81% year-on-year growth in government debt, up from a 59% growth pace in June. Government issued bonds totaled 8.9 trillion yuan ($1.24 trillion) in the first seven months of the year, which is up 4 trillion yuan from the previous year’s pace in the same period. This illustrates how China’s current economic growth model amid the tariff war is heavily dependent on government spending that must be financed by issuing debt certificates. It’s current campaign to reduce manufacturing over capacity will further increase its debt dependency.

Selling returned to the corn pit, with December corn poised for a possible test of Tuesday’s contract low of $3.92 after CONAB raised its Brazil total corn production number to 137.0 million metric tons, up more than 5 mmt from its previous estimate. That weighed on wheat as well, with soybeans seeing some profit taking from this week’s big gains after the surprise drop in acreage from USDA on Tuesday. Next week is the industry Midwest crop tour.

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Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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Perspective: Morning Commentary for August 5

August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

Matt ZellerWed, 05 Aug 2026, 12:39

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Perspective: Mid-Day Commentary for August 4

August 4 – The Dow Jones is absolutely piling on gains today, adding a similar number that led to yesterday’s record, with the benchmark index now nearing the 54k-point mark through mid-morning. The S&P also hit a new record, while the NASDAQ is exceeding both those gains on a percentage basis. The marketplace is optimistic on a U.S.-Iran trade deal, though the proposed resolution is still being “circulated between the parties”.

Mike CastleTue, 04 Aug 2026, 14:58

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