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 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: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

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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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