Perspective: Morning Commentary for February 15

By: Arlan Suderman, Chief Commodities Economist

Wed, 15 Feb 2023, 14:25

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 15 – Stock futures had a negative tone to them overnight as traders braced for more key economic data that may push the Federal Reserve to be more hawkish in future policy meetings. Stock futures added to their losses when the retail sales data was released this morning, along with many of the commodities initially adding to losses as well. The dollar rallied along with Treasury yields. Yet, once again, the VIX traded lower below 19, suggesting calm on Wall Street. The dollar index is trading near 103.9. Yields on 10-year Treasuries are trading near 3.78%, while yields on 2-year Treasuries are trading near 4.64%, after spiking to a fresh three-month high above 4.70% following the data release. Crude oil prices are modestly lower, while grain and oilseed prices are also mostly lower following the data release. Traders will now brace for tomorrow’s inflation data from the producer level.

Retail sales increased by 3.0% month-on-month in January, nearly doubling analyst expectations of a 1.7% increase, and much stronger than the 1.1% contraction seen in December. Retail sales minus vehicles rose 2.3% month-on-month in January, more than triple the 0.7% rise expected by analysts, and much stronger than the 0.9% contraction seen the previous month. Retail sales minus vehicles and gasoline sales rose 2.6% month-on-month in December, which far exceeded the 0.6% expected by analysts and it was also much better than the 0.4% contraction seen the previous month. The December data remained negative, but it was revised notably better than it was first reported, making today’s January month-on-month numbers even more impressive. We keep hearing about layoffs and sectors that are in a recession, but the data continues to show that our overall economy remains strong due to all of the stimulus that it still in it. The data doesn’t support the anecdotal reports.

One of those sectors that has been in a recession is manufacturing. The Empire State manufacturing index for February is -5.8, reflecting month-on-month contraction in the manufacturing sector in the New York Fed district. Yet, that is a dramatic improvement from the -32.9 registered in January and it was much better than the -18.5 expected by analysts. Consumer sentiment has been inching higher as he / she adjusts to the current higher inflation environment, resulting in increased purchases that are starting to show signs of improvement in the manufacturing sector. That improvement is seen in more survey respondents expecting better business conditions in the next six months, translating into more competition for employees.

That’s not how you bring down wage inflation, which continues to keep overall inflation well above the 2% mandated level. We’ve never tamed inflation in America without pressing the Fed’s benchmark interest above the rate of inflation, and the gap between the two remains at about 160 basis points. Fed fund futures this morning are pricing in expectations of another 25-basis point rate hike on March 22^nd, followed by two more similar hikes in the next two meetings taking us to 5.25% for peak rates. This number continues to creep higher, even as the economy continues to roll with inflation remaining sticky. Fed fund futures continue to suggest that we will see the Fed start to reduce rates by the December meeting, even though the Fed insists otherwise. The most interesting part of the next Fed meeting will likely be the dot plot graphic showing where each member sees the benchmark rate at the end of 2023, 2024 & 2025. I expect it to surprise the trade once again by showing member expectations that the Fed will take rates higher for longer than the market expects, even though those expectations have been moving that way.

One in ten Chinese women are permanently childless, according to research within China, according to today’s edition of China Direct, as published by our Shanghai office. That’s up 6% from five years ago, revealing a trend toward lower fertility rates in China that provide increasing challenges for China’s long-term economic and demand growth. Chinese women are increasingly less willing to have children, according to the research. Women reported that they plan to have 1.64 kids on average in 2021, down from 1.73 two years prior. The average size of a Chinese family dropped to 2.6 persons for household in 2020, down almost 0.5 units from 2010. The long-term viability of China’s desire to be the world’s dominant economic and military force in the world necessitates that it make some significant shifts in its strategies to reach its goal, and that appears to be behind many of the changes being implemented by President Xi Jinping. The population of China is already in decline, with India expected to take its place as the world’s most populous nation this year. That combined with China’s recent efforts to decrease protein inclusion in hog rations suggests that we may have seen peak soybean consumption in China in 2020 unless it comes up with other uses for the oilseed. Hogs consume 45% of the feed produced in China.

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Perspective: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

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Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

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Perspective: Morning Commentary for August 7

August 7 – The U.S. economy unexpectedly lost 23k jobs in July, dramatically below market expectations of an 80k increase and marking the worst Non-Farm Payrolls print since February. Furthermore, May and June were both revised sharply downward, with combined revisions showing 103k fewer jobs than previously reported. Outside of the healthcare sector, which added 22k jobs in July, the losses were very broad-based. Government payrolls saw the largest decline, shedding 53k jobs in July, the largest seen since October 2025, while June was revised down to show a loss of 10k jobs as well. The private sector at least saw growth, adding 30k jobs in July, now matching the month prior after it was revised down from the 49k initially reported, and substantially missing forecasts of 78k jobs being added. This is a sharp reversal in course from the largely better than expected U.S. labor data seen earlier this week.

Mike CastleFri, 07 Aug 2026, 13:26

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