Perspective: Morning Commentary for September 22

By: Arlan Suderman, Chief Commodities Economist

Thu, 22 Sep 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 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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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: Mid-Day Commentary for August 5

August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

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