Perspective: Morning Commentary January 16

By: Arlan Suderman, Chief Commodities Economist

Fri, 16 Jan 2026, 14:24

Guest Commentary by Mike Castle

Lead Market Intelligence Project Manager

January 16 – It’s a light day of economic data to finish out a choppy week ahead of the long weekend, with U.S. markets closed Monday for Martin Luther King Jr. Day. Geopolitical tensions have cooled from their fever pitch earlier in the week, with U.S. intervention in Iran looking less likely than previously expected, but the long weekend will still keep jitters present. Traders will get to hear from several Fed members today, however, with Boston Fed President Susan Collins and Fed Governors Michelle Bowman and Philip Jefferson all on the docket later in the day. Expectations overwhelmingly favor rates to be held steady at the FOMC’s upcoming January meeting, scheduled for the 27^th & 28^th, with the next cut now not seen until the June meeting. This reflects the shift of focus in the market to what happens after current chair Jerome Powell’s term ends in May, especially given the ongoing political pressure he is facing and concerns of what a lack of Fed independence could mean for the second half of 2026 and beyond. Recent economic data continues to show a surprising resilient U.S. economy, pointing to less need for rate cuts, and some even suggesting the possibility of rate hikes being necessary. The graphic below shows CME’s FedWatch tool’s target rate probabilities for the Fed’s final meeting of 2026, reflecting a wide range of possibilities given the heightened uncertainty today. The highest odds right now are for a total of 50 basis points worth of cuts by year-end, but Fed policy will assuredly remain a central focus throughout 2026.

Stocks are poised for a higher open to kick off the day, while the VIX remains relatively muted around 15.7 after spiking to a nearly two-month high above 18 earlier in the week. The dollar is trading just below unchanged after pushing to a six-week high yesterday, hovering around 99.25 at the time of writing. Treasuries are looking at a positive start to the day, with 10-year yields trading just below 4.19% and 2-year yields near 3.58%. Crude oil is looking to claw back some of yesterday’s sharp losses, with nearby WTI up roughly 1.2% to trade just below the $60 mark, potentially reflecting some of the lingering geopolitical risk presented by the long weekend alluded to above. Meanwhile, the ags are largely mixed, with the wheat complex leading the way higher.

The U.S. and Taiwan reached a trade deal yesterday, bringing headline tariffs on Taiwanese imports down to 15% from 20% previously (and now less than half of the initial 32% proposed back in April of last year), while a handful of imports will face no tariffs—like generic pharmaceuticals, aircraft components, and “unavailable natural resources.” The deal also includes lower or even zero tariffs on semiconductors or their manufacturing equipment for chipmakers, like TSMC, that expand their production within the States. As part of this deal, Taiwanese companies pledged to invest at least $250B in the U.S. (including $100B committed by TSMC already) to ramp-up the production of chips, energy, and AI as the two sides aim to expand ties within the rapidly expanding tech sector. Taiwan will also reportedly guarantee another $250B of credit to help accelerate additional investment. The news appears to be providing further tailwinds for tech stocks on Friday, piling onto yesterday's optimism after TSMC’s strong fourth quarter results helped ease lingering concerns about lofty AI valuations.

While the tech sector is happy with this deal, China is not. In response to the news, China’s Ministry of Foreign Affairs spokesman Guo Jiakun stated “China consistently and resolutely opposes any agreement signed between countries with which it has diplomatic relations and the Taiwan region of China.” This comes as no surprise, as we’ve heard very similar statements from China following many announcements regarding economic cooperation between the U.S. and Taiwan with China continuing to assert their claim to the island. The trend of strategic competitive positioning between the U.S. and China isn’t going anywhere, with this deal carrying not only economic, but also militaristic implications, stated plainly by Lutnick that “our president is the key to protecting their country.”

China signed a deal with our neighbor as well, with Canada agreeing to slash tariffs on Chinese electric vehicles in exchange for China slashing their own duties on Canadian canola. Canada will reportedly allow up to 49,000 Chinese EV’s initially at a tariff of 6.1%, down sharply from the 100% tariff implemented in 2024, while China will likewise lower their own rates to roughly 15% from the current 84% by the beginning of March. The deal is expected to also see reductions on imports of Canadian seafood, pulses, and other products currently facing punitive measures. Additionally, the countries look to increase cooperation in the energy sector, with Prime Minister Mark Carney stating Canada will double their energy grid over the next 15 years, noting the opportunities for Chinese investment/partnership in said expansion, while also noting Canada’s expansion of its liquified natural gas exports to Asia moving forward. The announcement sent canola futures surging higher, with the March contract posting a fresh six-week high.

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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: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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