Guest Commentary by Matt Zeller, Senior Market Intelligence Analyst
November 21 – U.S. Treasury yields are unchanged to slightly lower this morning, with the 10-year Treasury just a few ticks lower at the time of this writing, as the market waits for the release of Federal Reserve minutes this afternoon. The trade will parse language from that Oct-Nov meeting, even though the market has all but eliminated expected chances for further rate hikes thanks to slowing inflation indicators. The trade sees a 99%+ chance for interest rates to remain unchanged in the Fed December meeting, which would mark the third straight unchanged result. Dow Jones futures are showing a slight drop today after a strong session yesterday.
The Chicago Fed’s October National Activity Index fell to a -0.49 reading, compared to an unchanged average trade estimate, with September’s reading revised lower from 0.02 to -0.02 as well. Readings below zero indicate below-trend growth in the national economy. Existing home sales data for last month is on tap later this morning as well; the expected result there of 3.89 million homes would be down from 4.04 mln in September and continue an overall downtrend for the housing market that has continued since February, and really since last January overall.
Sources say Qatar could announce a deal as soon as today to release 50 women and children hostages in exchange for a four or five-day pause in fighting in Gaza, following weeks of diplomatic efforts from a number of countries. Israel would stop flying surveillance drones over northern Gaza for a period each day as part of the agreement. More than 1,200 people have been killed since the attacks began six weeks ago, with almost 250 hostages in captivity as fighting rages on between Israel and Hamas.
The grain trade seems to be uncertain about its stance on Brazilian dryness – understandably so, as Brazil is a massive country and its in the midst of a very different recent weather pattern split between north and south. Our lead forecaster Commodity Weather Group still expects good rains this week for dry center-west soybean regions, along with reduced temperatures, though concerns remain overall as chances shift back to the south next week. CBOT January soybeans have posted bullish moves now to start each of the last three weeks but have ultimately closed lower by the last two subsequent Friday afternoons; the market is on a reduced time frame this week due to the Thanksgiving break, off Thursday and with a slightly shortened session on tap Friday.
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