Perspective: Morning Commentary for January 30

By: Arlan Suderman, Chief Commodities Economist

Mon, 30 Jan 2023, 14:05

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

January 30 – It’s Fed week on Wall Street, which means that Wall Street will be zeroed in on this week’s meeting of the Federal Open Market Committee as it reviews its monetary policy. Key economic data will also come out this week, including Tuesday’s Employment Cost Index, which has significant implications for wage inflation, as well as productivity and cost data and monthly jobs data. This week’s events could set the tone for Wall Street for weeks to come, leaving traders a bit nervous this morning. Stock futures came under modest pressure overnight, which is a reversal from last week’s focus on the economy’s resiliency. The VIX is trading modestly higher near 20 this morning. The dollar index is trading near 101.9. Yields on 10-year Treasuries are trading near 3.54%, while yields on 2-year Treasuries are trading near 4.25%. Crude oil prices are 2% lower in early trade, while the grain and oilseed markets were mostly higher overnight, showing some early bullish energy to start the week.

The Fed will hold meetings to discuss the economy and potential changes to its monetary policy on Tuesday and Wednesday this week. It’s scheduled to release its revised monetary policy statement at 2 p.m. Eastern Time on Wednesday, followed by a press conference with Fed Chair Jerome Powell 30 minutes later. Every word will be parsed for signs of a shift in policy. The Fed knows that, so it will likely use that to its advantage. The market puts 99% odds that the Fed will raise its benchmark interest rate by just 25 basis points this time, so anything else would be a surprise for traders. Jerome Powell has done a great job of keeping the members of his policy board unified to this point, as has been reflected in unanimous votes to support policy statements. That will become more difficult this year, with some of the more dovish members likely first to start arguing for a pivot as economic data shows pain in the economy. The market probably won’t be too worried about one or two people voting against a policy, but more than that would increase uncertainty. I don’t see anything in the data to satisfy the Fed’s previously stated concerns about wage inflation, so I expect it to hold the line on what it has previously said in its official statement and in unofficial comments of its members. The market will likely get its 25-basis point rate hike, but it may get more of them than anticipated. We’ll have to wait for future meetings to see if that is true. I expect the Fed to remain true to its “higher and longer” rhetoric to keep the market focused on the problem while it slows the pace of rate hikes.

China’s economy is rapidly rebounding following a change in policy that removed Covid restrictions last month. Data now shows that Covid spread rapidly across the country, with infections peaking on December 22^nd, and then trending lower into this month. The first wave hit 80% of the population, essentially bringing China to herd immunity. Today’s edition of China Direct, published by our Shanghai office, included the following assessment of the economic recovery through the Lunar New Year holiday. “China’s pace of returning to normal life came sooner than expected. A total of 308 million domestic trips were made in China during the 7-day holidays, which was up by 23.1% year on year, and 88.6 % recovered to the pre-Covid level compared with the year 2019. Meanwhile, the domestic tourism revenue generated during the holiday totaled 375.8 billion yuan ($55.4 billion), 30% higher compared with last year, and 73.1% of the level seen in the same period of 2019. The box office revenue during the holiday reached 6.76 billion yuan ($1 billion), ranking the second highest in the record. Popular scenic spots were overwhelmed by crowds, and hotels, restaurants, and shopping malls in many cities were full of people. According to official monitoring data from the Ministry of Commerce, the sales of key retail and catering chain stores increased by 6.8% year on year, and the sales of grain and food, clothing, jewelry, and autos rose by 9%, 6%, 4.4%, and 3.6% respectively. Rapid rebounds in consumption and social activities were bullish to boost economic growth and demands for commodities.”

Twenty-five percent of Ukraine farmland is not available to be cropped in 2023 due to being occupied and/or directly impacted by the war, according to its government. It predicts that production could be slashed in half in 2023 from the lower 2022 levels due to reduced acreage, and the lack of financing, crop inputs, etc. We were impressed by the resiliency of Ukraine farmers in 2022, but the difficulties of war are catching up with them. The markets are growing wary of headlines coming from Ukraine nearly a year after Russia invaded its borders, but the implications on the balance sheet are still quite real. The war is intensifying as Russia responds to increased involvement from the West, which is increasingly sending more lethal military equipment. As such, the greater risk in 2023 is that the negative implications on the balance sheets will increase rather than improve in the year ahead. We just lack the compelling story to bring that impact to the front of the trade’s focus currently. Rather, the focus is currently on monetary policy this week, as well as the slowly advancing Brazilian harvest and lingering drought in Argentina. Recent rains brought a halt to drought damage there, but the longer-range forecasts suggest some risks of a return of stress. Harvest delays in Brazil lengthen the U.S. soybean export season for now. The harvest delays aren’t a concern yet, but they will be more of a problem if they continue another 10 days to two weeks. As a result, money flow into the commodities continues in late January.

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Perspective: Morning Commentary for August 6

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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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